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QMS Media Limited Chairman’s letter 30 June 2015

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QMS Media Limited ABN 71 603 037 341 Statutory Financial Accounts - 30 June 2015

QMS Media Limited Contents 30 June 2015

1

Chairman’s letter 2

Chief Executive Officer’s report 3

Detailed operating and financial review 5

Index to Directors’ report 8

Directors’ report 9

Corporate governance statement 21

Consolidated statement of profit or loss and other comprehensive income 32

Consolidated statement of financial position 33

Consolidated statement of changes in equity 34

Consolidated statement of cash flows 35

Index to Notes to the consolidated financial statements 36

Notes to the consolidated financial statements 37

Directors’ declaration 71

Independent audit report 72

Auditor’s independence declaration under Section 307C of the Corporations Act 2001 74

ASX additional information 75

QMS Media Limited Chairman’s letter 30 June 2015

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On behalf of the Board of Directors, it is a pleasure to present QMS Media’s 2015 Annual Report to shareholders, our first as an ASX-listed company.

The year has seen QMS Media achieve the significant milestone of listing on the Australian Securities Exchange (ASX) in June 2015. On a pro forma basis, the year has been characterised by strong growth in revenues and we are pleased to report that we have achieved the Prospectus forecasts for all financial metrics. Revenue of $59.6m for 2015 was marginally ahead of pro forma Prospectus revenues and an increase of 35.1% on 2014. Pro forma EBITDA of $4.7m was ahead of FY14 Prospectus EBITDA of $3.1m. As foreshadowed in the Prospectus, no dividend for the 2015 year was declared by the Board, and we remain confident about the prospects of the company and confirm the dividend policy outlined in the Prospectus.

QMS Media is one of Australia’s leading outdoor advertising companies, with a high quality and growing portfolio of premium, long tenure and high yielding assets across landmark digital billboards, static billboards and street furniture. This presence extends into New Zealand and Indonesia, providing future growth opportunities through the retail and transit categories.

This is an exciting time for outdoor advertising, with the sector in Australia now generating over $600 million in annual revenues. Outdoor is the second fastest growing medium of the $11.6 billion advertising market and accounts for over 5% of total advertising expenditure. The rapid growth in outdoor is being driven by advancements in digital technology, with digital now accounting for some 24% of total outdoor revenue. Digital is appealing to advertisers because it provides a platform to make consumer messaging more immediate, targeted and relevant.

We expect industry growth to continue with outdoor revenues growing ahead of traditional media. QMS Media is well positioned to capitalise on these trends as we continue to develop our platform across key markets. We have a strong presence in digital billboards with 21 landmark digital sites in operation at 30 June 2015.

Our digital development strategy remains on track with 3 new sites in operation since 30 June 2015, including our iconic Punt Road, Crown and Eastern Freeway Melbourne signs. An additional 9 new landmark billboards are planned to be operational during the remainder of the 2016 financial year. Our digital strategy is focused on high profile metropolitan locations across Sydney, Melbourne, Brisbane, Adelaide, Perth and the Gold Coast; providing advertisers with long dwell times and maximum audience exposure, enabling these assets to deliver strong yields.

We are also progressing well with our strategy of expanding our market coverage in Indonesia and New Zealand with new contract wins in Bali’s Ngurah Rai International and Domestic airport terminals in May and a new agreement signed with Auckland Transport in August 2015. These contracts provide a solid platform for growth of the international business.

I would like to take this opportunity to thank our Chief Executive, Barclay Nettlefold, and the rest of the QMS Media management team and employees for their hard work and commitment during a very busy 2015. There has been a considerable amount of work involved in both the listing process and in executing a number of acquisitions which enabled QMS Media to bring together a high quality portfolio of outdoor advertising assets. In addition, the board has worked hard to put in place a governance structure to support the business. I am confident that the team’s energy and passion for the business will enable QMS Media to continue to execute our strategy and to deliver a strong result for our shareholders in the year ahead.

Finally, on behalf of the Board I would like to thank you, our new shareholders, for your interest in QMS Media and for your continued support.

Yours sincerely,

Wayne Stevenson,

Chairman

QMS Media Limited Detailed operating and financial review 30 June 2015

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I am pleased to deliver QMS Media’s first Operating and Financial Review as an ASX-listed Company. FY15 was a milestone year for QMS Media. The Company successfully listed on the ASX in June 2015, the planned IPO Acquisitions are on track and are largely completed, and all key pro forma FY15 financial metrics were delivered in line with or ahead of Prospectus forecast.

Overview of QMS Media QMS Media is one of Australia’s leading outdoor advertising companies, with a high quality and growing portfolio of outdoor advertising assets, including:

Landmark digital billboards (Sydney, Melbourne, Brisbane, Adelaide and Gold Coast);

Static billboards (Sydney, Melbourne, Brisbane, Adelaide, Perth and Indonesia);

Street Furniture (Gold Coast);

Retail sites in and around shopping centres, supermarkets, and other lifestyle venues (New Zealand); and

Transit sites, including advertising that appears on the exterior or interior of public transportation vehicles or stations, or within an airport precinct (New Zealand and Indonesia).

QMS Media’s primary operations are in Australia, with Australian-based activities generating more than 85% of consolidated revenue in FY15. The Company also has international outdoor advertising operations in New Zealand and Indonesia.

Strong platform for growth established, digital development strategy on track QMS Media has established a strong platform for growth, and is well positioned to capitalise on growth in the outdoor advertising industry, driven by the strong demand for digital assets from advertisers.

The Company’s digital development strategy is on schedule, with 21 landmark digital billboards in place at 30 June 2015, in line with the FY15 Prospectus forecast.

The Company is on track to deliver an additional 12 landmark digital billboards in FY16, with three iconic Melbourne signs, “The Punt”, “The Crown” and “The Eastern” now operational. An additional five digital signs are expected to be operational by 31 December 2015, with the remaining four digital signs expected to be delivered in H2 FY16. All required planning and development permits for the remaining nine digital sites to be delivered in FY16 have been obtained.

In addition, the Company will continue to add to its longer-term digital development pipeline, including through the conversion of existing static billboards to digital, and through selective development opportunties.

Complementing its digital development strategy, the Company has made progress in the development of its portfolio of static assets, with the addition of over 129 static billboard sites in FY15, and will continue to add to its inventory in locations where there is advertiser demand. In FY16, this will include the installation of new static billboards under the Company’s concessions with VicTrack, Eastlink Toll and Auckland Transport

This supports our overall strategy of building a platform of premium quality assets, complemented by strong market coverage to deliver quality, impact and reach to our customers. In our International business, key strategic contracts have been secured, including the Bali Ngurah Rai International and Domestic Airport terminal concession, and the Auckland Transport media services agreement, which was signed on 26 August 2015 for nine years including options. These key contracts will support growth in our Asia Pacific business from FY16.


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FY15 financial performance overview All key pro forma financial metrics were delivered in line with or ahead of the Company’s FY15 Prospectus forecast:

Pro forma revenue of $59.6 million

Pro forma EBITDA of $4.7 million, $1.6 million ahead of Prospectus forecast

Pro forma NPAT loss of $4.3 million (after $5.3 million of significant items)

Pro forma NPATA (before significant items) of $2.6 million, ahead of the Prospectus forecast of $0.6 million

The addition of 18 new digital billboards in FY15 provided a strong revenue contribution with digital contributing 24 per cent of QMS Media’s FY15 Australian media revenue. The contribution from digital is expected to grow further in FY16, with 85% of forecast Australian media revenue for H1 FY16 already committed, with over 50% of that revenue coming from digital. On a statutory basis, the Company reported revenue of $4.1 million and an after tax loss of $4.9 million, which reflects a statutory trading period of only seven days for the majority of the Company’s assets (which were acquired on or around 23 June 2015), and significant items such as IPO and related acquisition transaction expenses. A review of the Company’s FY15 financial performance is detailed on pages 5-7. Earnings guidance for H1 FY16

The following guidance has previously been provided for H1 FY16:

Approximate revenue: $41.0 million

Approximate EBITDA: $9.5 million

Revenue and earnings for H2 FY16 will benefit from the full period impact of new digital screens installed in H1 FY16 and uplifts from the Bali Ngurah Rai International Airport and Auckland Transport concessions.

The Board remains confident in the business’ growth opportunities and confirms the dividend policy outlined in the Prospectus. Conclusion I would like to extend a warm welcome to the new shareholders who joined the business through the IPO, and thank all shareholders for your support of the business in this important period for the Company. The IPO and the Company’s transition to an ASX-listed company was a key milestone in the evolution and growth of the business, and I would like to sincerely thank everyone involved for their diligence and commitment to the Company’s success.

The Board, management and all of the QMS Media team remains passionate and focused on delivering our strategic agenda in what is a very exciting time for the Company and the outdoor media industry more broadly.

I am personally very excited by the future, and look forward to delivering on the significant opportunities for QMS Media in the year ahead.

Yours sincerely,

Barclay David Nettlefold

Chief Executive Officer


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As outlined in the Prospectus, QMS Media completed the majority of the IPO Acquisitions in the period from 23 June 2015 to 26 June 2015, prior to listing on the ASX. The statutory accounts of the Company therefore represents a very short period of trading for the acquired entities, which as a result is not indicative of the full year potential of these businesses for FY16. For that reason, this report focuses more on pro forma financial performance of the Company during FY15 to allow year on year comparisons to be made and to provide a picture of what FY15 financial performance would have been if the Company, including the entities acquired in June, had traded as a consolidated entity for a full 12 months.

The Company’s statutory and pro forma financial results for FY15 are summarised below:

Statutory to Pro forma reconciliation 30-Jun-15 30-Jun-15

$A millionPro forma

actual

Pro forma

forecast

Pro forma NPAT (4.3) (7.1)

Pro forma full year impact of acquisitions 5.2 6.8

IPO and acquisition transaction costs (2.8) (0.9)

Convertible notes expense (3.0) (3.0)

Statutory NPAT (4.9) (4.2)

Statutory financial information 30-Jun-15 30-Jun-15

$A millionStatutory

actual

Prospectus

forecast

Statutory Revenue from ordinary activities 4.1 2.0

Statutory Profit (Loss) from ordinary activities after tax attributable to

the members (4.9) (4.2)

Statutory Profit (Loss) before tax from ordinary activities for the period

attributable to members (5.6) (4.7)

Pro forma financial information 30-Jun-15 30-Jun-15

$A millionPro forma

actual

Pro forma

forecast

Revenue 59.6 59.4

Cost of media sites and production (35.3) (36.6)

Gross profit 24.4 22.8

Operating expenses (19.7) (19.7)

EBITDA 4.7 3.1

D&A (4.0) (4.6)

EBIT (before significant items) 0.6 (1.5)

Significant items1 (5.3) (5.4)

EBIT (4.7) (6.9)

Interest (0.3) (0.4)

Tax 0.7 0.2

NPAT (4.3) (7.1)

NPATA (before significant items) 2.6 0.6


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Review and commentary Revenue of $59.6 million for FY15 represented growth of 35.1% on FY14 on a pro forma basis. Growth was driven by expanded media inventory and continued market demand for quality large format digital sites. The first few months of trading in FY16 demonstrate continued demand from advertisers for high quality digital sites, and is driving an increase in the proportion of total revenues that the Company earns from the sale of advertising on digital assets. Gross profit of $24.4 million for FY15 represented an increase of 25.7% on FY14 on a pro forma basis, but a decline in gross margin from 44% to 41%. The gross margin decline reflects a shift in the revenue mix as media assumes a relatively heavier weighting than production. The Company generates lower gross margins but higher net margins from media revenues as compared to print and production revenues. Gross profit exceeded Prospectus forecasts by 7%, primarily due to the Company being able to capture within group operations the margin that was previously outsourced to external suppliers. Operating expenses increased 19.7% in FY15. The majority of the increase reflects investment in employees required to support the growth in the Company’s development, sales and operations. Whilst additional staff will be recruited during FY16 to support the Company’s continued growth, the Company invested in staff “ahead of the curve” in FY15 to ensure there was sufficient capacity to support the IPO acquisitions and the organic growth expected during FY16. EBITDA of $4.7 million for FY15 was significantly higher than the Prospectus forecast of $3.1 million, with the improvement attributable to media revenues being stronger than anticipated and gross margin being materially better than forecast. Growth in EBITDA on FY14 on a pro forma basis was not significant in absolute terms ($1.0 million) but reflects the focus in the latter part of FY15 on completing the IPO and putting in place the asset platform for FY16. The pro forma net loss after tax of $4.3 million was better than Prospectus forecast and reflected the better than forecast EBITDA result, as well as a lower than forecast amortisation expense as the Company moved to calculating amortisation by reference to weighted average expiry of leasehold rights.

Australian outdoor advertising market

The strength of the Australian outdoor advertising market is fundamentally important to the Company’s financial performance. During CY14 CEASA1 reported total advertising expenditure in Australia of $11.6 billion, with Outdoor representing 5.2% share, up from 4.8% in CY13. Expenditure on outdoor media experienced unprecedented growth in CY14, posting a 10% overall increase on net revenue year on year, taking the industry's net revenue to $602.1 million, up from $547.6 million in CY13. The Company is confident that the shift to increased advertising expenditure on outdoor advertising assets is structural rather than temporary, and while FY14/15 year-on-year growth rates may not reflect the level of growth achieved in FY15, the performance of the outdoor advertising market is expected to remain strong, reflecting: (1) the ability of outdoor advertising to engage with consumers in a receptive forum; (2) demand for digital assets that give advertisers the ability to communicate with consumers immediately and to adapt the message being communicated to account for time of day, weather, demographic of viewers, events and other external factors; and (3) the continued fragmentation of mainstream media.

1 Commercial Economic Advisory Service of Australia (CEASA)


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Funding Primary funding sources for the Company’s operations during FY15 were the issue of a convertible note, proceeds of the IPO share issue and a loan facility with Australia & New Zealand Banking Group Limited. As at 30 June 2015 the Company had $21.4m in cash and cash equivalents. Since 30 June 2015, as outlined in the Prospectus, the Company has completed the acquisition of certain outdoor advertising sites in Victoria operated under the Drive By Media name for $7.7 million. On 28 July 2015, the Company executed a facility agreement and associated security documents for new banking facilities with ANZ. The facility limit under the new banking facility is $10,010,000 and is available for drawings in Australian dollars by way of cash advance, bank guarantee, equipment and asset financing and ancillary facilities. The maturity date of the facility is 31 October 2016. Funding sources for FY16 are the balance of funds available from the IPO, the ANZ facility and cash from operations. The Company has sufficient funds to support its current activities. Risks The major risks identified by the Company to its operational and financial performance for FY16 are discussed below. Like all companies operating in competitive market places there are many risks and the risks identified below are not an exhaustive list of all risks faced by the Company.

The financial performance of the Company is heavily dependent on the strength of outdoor advertising expenditure. The outdoor advertising industry has grown strongly during FY15 in all key markets in which the Company operates. A downturn in the general level of advertising expenditure or a shift in the allocation of advertising expenditure to other formats (e.g. television, online, radio) could negatively impact the Company’s financial performance.

The digital outdoor advertising sector is highly competitive and demand for digital advertising sites may raise market rents with a resulting adverse effect on the Company’s gross margin.

The Company is heavily reliant on its relationships with media agencies to sell the outdoor media assets that it owns and/or manages. Accordingly, the loss of these relationships or a significant change in the media landscape could adversely impact the Company’s ability to generate revenues.

The Company seeks to constantly expand its inventory of premium billboards. Failure to execute roll out of billboards in accordance with planned timetables will negatively impact upon expected future revenues.

The Audit and Risk Committee together with the executive management team is primarily responsible for managing risk. The Company constantly monitors risks to operations and financial performance and, where commercially viable, utilises risk mitigation tools and strategies.

QMS Media Limited Directors’ report 30 June 2015

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1. Directors 9

2. Principal activities 9

3. Operating and financial review 9

4. Dividends 9

5. Significant changes in the state of affairs 10

6. Matters subsequent to the end of the Financial Period 11

7. Likely developments 11

8. Environmental regulation 11

9. Information on Directors 12

10. Company secretary 13

11. Directors’ meetings 13

12. Proceedings on behalf of the Company 13

13. Auditor 13

14. Indemnification and insurance of officers and auditors 14

15. Non-audit services 14

16. Auditor’s independence declaration 14

17. Officers of the Company who are former partners of KPMG 14

18. Directors’ interests 15

19. Rounding off 15

20. Remuneration report – audited 15


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The directors present their report together with the consolidated financial statements of the Group comprising of QMS Media Limited (the “Company”) and its subsidiaries for the period ended 30 June 2015.

The Company was formed on 25 November 2014 to aggregate a number of outdoor advertising assets, including the businesses conducted by QMS APAC and the outdoor advertising assets of Paramount Outdoor, Octopus Media and Drive By Media amongst others.

The following persons were directors of the Company at any time during or since 30 June 2015:

Wayne Stevenson (Chairman – appointed 10 April 2015)

Barclay Nettlefold (appointed 25 November 2014)

David Edmonds (appointed 25 November2014)

Anne Parsons (appointed 10 April 2015)

Robert Alexander (appointed 10 April 2015)

Philip Mehrten (resigned 10 April 2015)

The principal activities of the Group during the course of the financial period were the provision of advertising services.

The loss for the Group after providing for income tax was $4,844,000. This result was impacted by the costs of the initial public offering of the Company in June 2015. A review of the Group is included in the Chief Executive Officer’s report and the detailed operating and financial review set out in pages 3 to 7.

Shareholder returns

2015

Loss attributable to owners of the Company (4,844,000)

Basic and diluted EPS (0.33) cents

Dividend paid NIL

Dividend per share NIL

Net loss amounts have been calculated in accordance with Australian Accounting Standards (AASBs).

Dividends have not been paid or declared by the Company to members during the period.


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Since its formation on 25 November 2014, the Company obtained control of the following entities:

Entity Date control gained

QMS Australian Holdings Pty Ltd 10 March 2015

Riverview Signage Pty Ltd ATF Riverview Signage Trust 17 March 2015

Riverview Signage Trust 17 March 2015

Digital Outdoor Media (Aust) Pty Ltd 18 March 2015

Digital Outdoor Media (NSW) Pty Ltd 18 March 2015

Digital Outdoor Media (QLD) Pty Ltd 18 March 2015

Digital Outdoor Media (WA) Pty Ltd 18 March 2015

Digital Outdoor Media (Vic) Pty Ltd 18 March 2015

QMS NZ Holdings Limited 31 March 2015

Ambient Advertising NZ Limited 2 April 2015

QMS NZ Retail Limited 10 April 2015

MMTB Pty Ltd 23 June 2015

MMT Land Pty Ltd 23 June 2015

Omnigraphics Australia Pty Ltd 23 June 2015

Paramount Outdoor Pty Ltd 23 June 2015

PT INsite Media 23 June 2015

Standout Media Pty Ltd 23 June 2015

Q Media Pty Ltd 23 June 2015

QMS Australia Pty Ltd 23 June 2015

QMS Insite Media Pte Ltd 23 June 2015

QMS Rail Media Pty Ltd 23 June 2015

BMG Australasia Pty Ltd 25 June 2015

Plexity Holdings Pty Ltd 25 June 2015


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The Group issued a Prospectus on 10 June 2015 and on 29 June 2015 the Group was admitted to the Official List of ASX Limited with the ASX code QMS.

There were no other significant changes in the state of affairs of the Group during the financial period.

On the 28 July 2015, the Company executed a facility agreement and associated security documents for new banking facilities with the Australia and New Zealand Banking Group Limited (“ANZ”). The facility replaced existing banking facilities with the ANZ that were held in the names of the subsidiaries that were acquired on the 23 June 2015. The limit under the new banking facility was increased to $10,010,000 and is available for drawings in Australian dollars by way of cash advance, bank guarantee, equipment and asset financing and ancillary facilities. The facility agreement contains the usual security and financial covenants typical for facilities of this nature.

On the 7 August 2015, Digital Outdoor Media (Vic) Pty Ltd, a 100% wholly owned subsidiary of the Company, completed the acquisition of certain out of home advertising sites in Victoria operated under the Drive By Media name for $7,700,000.

On 26 August 2015, Ambient Advertising NZ Limited, a 75% owned subsidiary of the Company, signed a Media Services agreement with Auckland Transport to manage all the existing outdoor advertising assets of Auckland Transport.

Other than the matters discussed above, there has not arisen in the interval between the end of the financial period and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the directors of the Company, to affect significantly the operations of the Group, the results of those operations, or the state of affairs of the Group, in future financial years.

There are no other circumstances or matters that will significantly affect the operations and future results of the Group other than the developments that have been outlined in this report and the operating and financial review included in the CEO’s report.

The Company complies with all environmental laws and regulations applicable to it.


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Experience, special responsibilities and other directorships

Wayne Stevenson

Chartered Accountant

Fellow of the Australian Institute of Company Directors.

Bachelor of Commerce (Accounting)

Independent Non-Executive Chairman

Chairman of the Remuneration, Nomination & Corporate Governance Committee.

Appointed 10 April 2015

Experienced financial services executive with extensive finance, strategy and operational expertise across Australasian and International markets

Wayne has been involved in the finance industry for over 30 years, and has gained a wide range of experience, particularly with the ANZ Banking Group.

Independent non-executive directorship:

OnePath Life Insurance Ltd

OnePath General Insurance Ltd

ANZ Lenders Mortgage Insurance Ltd

Credit Union Australia Limited

Barclay Nettlefold

Bachelor Degree (Accounting and Marketing)

Chief Executive Officer

Appointed 25 November 2014

Barclay is an experienced advertising and media executive with over 30 years’ experience in the Asia Pacific who has managed and developed various outdoor advertising businesses in the region.

Co-Founder of Nettlefold Advertising sold to Hoyts Group

Co-Founder of Eye Corp

Founder of News Outdoor South East Asia, in partnership with News Corp

Formed QMS APAC as a JV with Qatar Media

Anne Parsons

Journalism and Business Psychology

Independent Non-Executive Director


Anne is a highly regarded advertising and media executive with over 20 years’ experience gained in a wide variety of roles across the globe. She has worked in many media channels and has extensive experience in multi-channel solutions.

Currently managing partner of Cherry London

Chairman of MediaCom Australia, and CEO for 6 years

MD of Zenith Media Melbourne for 10 years

David Edmonds

Bachelor of Law and Commerce (Hons)

Director of Corporate & Legal


David is a corporate finance lawyer, with significant experience in mergers and acquisitions, project financing and business development in Australia, Indonesia and Thailand. Previously with Minter Ellison and Blake Dawson Waldron (now Ashurst), David has worked in the outdoor advertising industry for over 10 years throughout the Asia Pacific region.

Jakarta, Indonesia with Blake Dawson Waldron and then Minter Ellison affiliated firms

Established Thailand office of Minter Ellison in Bangkok

Regional COO and general counsel for News Outdoor Group for Asia Pacific

Led commercial strategy and negotiations for QMS APAC M&A team.


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Experience, special responsibilities and other directorships

Robert Alexander


Bachelor of Commerce Degree

Independent Non-Executive Director

Chairman of the Audit and Risk Management Committee


Robert is an experienced senior finance and operations executive who has over 30 years’ experience working the commercial sector. Robert has worked in global organisations in industries such as media, entertainment, professional services and the print industry, with considerable experience in mergers and acquisitions.

Global CFO of Eye Corp Pty Ltd

Global CFO of OPUS Group Limited

Senior finance and operations experience with major organisations including Universal Music and Hoyts Entertainment Ltd.

Philip Murray Mehrten

Non- Executive Director


Resigned 10 April 2015

Philip has significant experience in construction and site/asset development, having acted as a director for large nation-wide building and construction companies.

Anthony Carafa, Member of the Institute of Chartered Accountants in Australia was appointed to the position of Company secretary in June 2015. Anthony Carafa has previously held roles as an officeholder and acted in this capacity in advising many large businesses in various corporate matters and ASIC compliance related services.

The Company was formed on 25 November 2014 with the first Board meeting held on 10 April 2015. During the period 25 November 2014 to 30 June 2015 there were five Board meetings and one Audit and Risk Management Committee meeting which were attended by all relevant directors. There was no Remuneration, Nomination and Corporate Governance Committee meeting held during the period.

No person has applied to the court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Company or to intervene in any proceedings to which the Company is a party for the purposes of taking responsibility on behalf of the Company for all or part of those proceedings.

KPMG was appointed as auditor of the Group on 17 May 2015 by resolution of the Board of Directors.


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The Company has indemnified the directors and officers of the Company for costs incurred, in their capacity as a director or officer, for which they may be held personally liable, except where the liability arises out of conduct involving a lack of good faith.

During the financial period, the Company paid a premium to insure the directors and officers of the Company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability, the name of the insurer, the limit of liability and the premium paid for the policy.

The Company has not, during or since the end of the financial period, indemnified or agreed to indemnify the auditor of the Company or related entity against a liability incurred by the auditor. During the financial period, the Company has not paid a premium in respect of a contract to insure the auditor of the Company or any related entity.

During the period KPMG, the Group’s auditor, has performed certain other services in addition to their statutory duties.

The Board has considered the non-audit services provided during the period by the auditor and is satisfied that the provision of those non-audit services is compatible with, and did not compromise, the auditor independence requirements of the Corporations Act 2001 for the following reasons:

all non-audit services were subject to the corporate governance procedures adopted by the Group and have been reviewed by the Audit and Risk Management Committee to ensure they do not impact the integrity and objectivity of the auditor; and

the non-audit services provided do not undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants, as they did not involve reviewing or auditing the auditor’s own work, acting in a management or decision making capacity for the Group, acting as an advocate for the Group or jointly sharing risks and rewards.

Details of the amounts paid to the auditor of the Group, KPMG, and its network firms for non-audit services provided during the period are set out below.

2015

$'000

Services other than audit and review of financial statements

Other assurance services

Investigative Accountant services in relation to IPO 1,665

Total paid to KPMG 1,665

The auditor’s independence declaration is set out on page 73 and forms part of the directors’ report for the financial period ended 30 June 2015.

There are no officers of the Company that were former partners of the audit firm, KPMG.


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The relevant interest of each director in the shares, debentures, interests in registered schemes and rights or options over such instruments issued by the companies within the Group and other related bodies corporate, as notified by the directors to the ASX in accordance with S205G(1) of the Corporations Act 2001, at the date of this report is as follows:

Ordinary shares

Barclay Nettlefold 45,059,236

David Edmonds 1,375,000

Wayne Stevenson 769,230

Anne Parsons NIL

Robert Alexander NIL

There are no rights or options over ordinary shares.

The Group is of a kind referred to in ASIC Class Order 98/100 dated 10 July 1998 and in accordance with that Class Order, amounts in the financial report and directors’ report have been rounded off to the nearest thousand dollars, unless otherwise stated.

Introduction

Following completion by the Company of the recent acquisitions and listing on the ASX this report details the historic remuneration framework for the period ending 30 June 2015 as well as the guiding principles that will drive the development of a remuneration framework which supports the business strategy and creation of sustainable value for shareholders.

Executive remuneration

During the period ended 30 June 2015 the key management personnel (KMP) of the Group were engaged as full time permanent staff or consultants of the Company and full time permanent staff or consultants of Q Media Pty Ltd (an entity consolidated by the Group from 23 June 2015). The arrangements are described in the table below. The agreement commencement date of 23 June 2015 as shown in the table for each KMP engaged by Q Media Pty Ltd reflects that the Company acquired Q Media Pty Ltd on that date.

The employment and contractor arrangements in place as at 30 June 2015 were all voluntarily terminated on that date and all KMP entered into standard employment contracts with the Company effective 1 July 2015. Those new employment contracts govern the notice period for termination and payment due on termination without notice. That information is described in the table below.


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NameAgreement

commenced

Term Agreement

expiry

Notice of

Termination

Termination

payment

Barclay Nettlefold - Director / CEO # 23 June 2015 No expiry 24 Months 24 Months

David Edmonds - Director Corporate / Legal ^ 23 June 2015 No expiry 12 Months 12 Months

John O'Neill - Head of Sales + 1 January 2015 No expiry 12 Months 12 Months

Peter Cargin -Chief Financial Officer * 15 April 2015 No expiry 9 Months 9 Months

Adam Trevena - Chief Commercial Officer # 23 June 2015 No expiry 9 Months 9 Months

Malcolm Pearce - Chief Operating Officer ^ 23 June 2015 No expiry 9 Months 9 Months

Sara Lappage - Chief Marketing Officer ^ 23 June 2015 No expiry 6 Months 6 Months

Steve Danaher- General Manager - Sales # 23 June 2015 No expiry 9 Months 9 Months

Mark Rowswell - General Manager - Development ^ 23 June 2015 No expiry 6 Months 6 Months

# Employment contract is with Q Media Pty Ltd, a subsidiary of QMS Media Limited

^ Consultant agreement is with Q Media Pty Ltd, a subsidiary of QMS Media Limited

* Employment contract is with QMS Media Limited

+ Consultant agreement is with QMS Media Limited

Remuneration framework

The Board recognises the disparities between the compensation arrangements inherited through the various acquisitions and is undertaking a review of the overall remuneration framework with assistance from independent advisers.

The remuneration framework being developed will provide a clear and transparent process with the following key principles:

Alignment of executive performance with creation of sustainable value for shareholders;

Motivation and retention of executives through a mix of fixed and variable (at risk) pay; and

A competitive remuneration framework which will assist the Company to attract and retain talent.

The Board will meet with a number of key shareholders and proxy advisers to communicate the intended remuneration framework and ensure transparency around Director and KMP remuneration. The Board will also utilise the services of remuneration consultants and will seek appropriate advice to ensure that the framework aligns with business strategies and key external stakeholder expectations.

Fixed compensation

Compensation levels will be reviewed annually by the Remuneration, Nomination and Corporate Governance (“RNCG”) Committee through a process that considers individual and overall performance of the Group. The RNCG Committee may from time to time engage external consultants to provide analysis and advice to ensure directors’ and other KMP compensation is competitive in the market place. KMP’s compensation will also be reviewed on promotion.

Performance linked compensation

KMP employment contracts allow for discretionary bonus and other discretionary benefits to be paid. No bonuses or other incentives were paid under the various arrangements applicable for the period ending 30 June 2015 and no bonuses or other incentives have at the date of this report been paid under the new KMP employment contracts that became effective on 1 July 2015.

The Company has adopted rules for an Employee Incentive Plan which allows it to issue Options, or such other approved securities convertible into Shares to eligible persons (including Directors, subject to compliance with the ASX Listing Rules) as the Board approves from time to time. Details of the Employee Incentive Plan are published on the Company’s website. At the date of this report, no securities have been issued under the Plan.


17

Non-executive directors

Total compensation for all non-executive directors is not to exceed $350,000 per annum and is set based on advice from external advisors with reference to fees paid to other non-executive directors of comparable companies. The base fee for the Chairperson is $110,000 per annum. Base fees for other directors are $75,000 per annum.

Directors’ base fees cover all main Board activities. In his capacity as Chairman of the Audit and Risk Management Committee, Robert Alexander receives an additional payment of $10,000 per annum. Wayne Stevenson, in his capacity as Chairman of the RNCG Committee, receives an additional payment of $10,000 per annum.

Non-executive directors have not received performance-related compensation and are not provided with retirement benefits, apart from statutory superannuation.


18

Executive and Non-Executive officers’ remuneration

Details of the nature and amount of each major element of remuneration of each executive and non-executive director of the Group for the period ending 30 June 2015 are:

Post-

employment

Share-based

payments

in dollars

Salary &

fees

STI cash

bonus

Non-

monetary

benefits Total

Super-

annuation

benefits

Options and

rights

Directors

Non-executive directors

Wayne Stevenson 26,667 - - 26,667 2,533 - - - 29,200 - -

Robert Alexander 18,889 - - 18,889 1,794 - - - 20,683 - -

Anne Parsons 16,667 - - 16,667 1,583 - - - 18,250 - -

Sub-total non-executive directors'

remuneration 62,223 - - 62,223 5,910 - - - 68,133 - -

Executive Directors

Barclay Nettlefold # 7,333 - - 7,333 697 - - - 8,030 - -

David Edmonds ^ 4,000 - - 4,000 - - - - 4,000 - -

Total directors' remuneration 73,556 - - 73,556 6,607 - - - 80,163 - -

# employed by Q Media Pty Ltd, a subsidiary of QMS Media Limited. The salary paid relates to the period from the date of acquisition of Q Media Pty Ltd (23 June 2015) to the 30 June 2015

^ engaged as a consultant by Q Media Pty Ltd, a subsidiary of QMS Media Limited. The fees paid relates to the period from the date of acquisition of Q Media Pty Ltd (23 June 2015) to the 30 June 2015

Short-term Proportion of

remuneration

performance

related

Value of options as

proportion of

remuneration

Other long

term

benefits

Termination

benefits Total


19

Executive officers’ remuneration

Details of the nature and amount of each major element of remuneration of each executive officer of the Group for the period ending 30 June 2015 are:

Post-

employment

Share-based

payments

in dollars Salary & fees

STI cash

bonus

Non-

monetary

benefits Total

Super-

annuation

benefits

Options and

rights

Executive Officers

John O'Neill - Head of Sales + 261,417 - - 261,417 - - - - 261,417 - -

Peter Cargin - Chief Financial

Officer * 59,270 - - 59,270 5,631 - - - 64,901 - -

Adam Trevena- Chief Commercial

Officer # 7,222 - - 7,222 686 - - - 7,908 - -

Malcolm Pearce - Chief Operating

Officer ^ 6,111 - - 6,111 - - - - 6,111 - -

Sara Lappage - Chief Marketing

Officer ^ 5,200 - - 5,200 - - - - 5,200 - -

Steve Danaher - General

Manager Sales # 5,889 - - 5,889 559 - - - 6,448 - -

Mark Rowswell - General

Manager Development ^ 4,500 - - 4,500 - - - - 4,500 - -

Total Executive Officers

remuneration 349,609 - - 349,609 6,876 - - - 356,485 - -

Total KMP 423,165 - - 423,165 13,483 - - - 436,648 - -

* employed from 15 April 2015 by QMS Media Limited

# employed by Q Media Pty Ltd, a subsidiary of QMS Media Limited. The salary paid relates to the period from the date of acquisition of Q Media Pty Ltd (23 June 2015) and 30 June 2015

+ engaged as a consultant by QMS Media Limited from 1 January 2015 to 30 June 2015

^ engaged as a consultant by Q Media Pty Ltd, a subsidiary of QMS Media Limited. The fees paid relates to the period from the date of acquisition of Q Media Pty Ltd (23 June 2015) to the 30 June 2015

Short-term

Other long

term benefits

Termination

benefits Total

Proportion of

remuneration

performance

related

Value of options

as proportion of

remuneration


20

Analysis of bonuses included in remuneration

There were no bonuses paid to any director or key management personnel for the period ended 30 June 2015.

Loans to or from the Company with key management personal and their related parties

While there were movements in related party loans during the period, these balances were repaid prior to 30 June 2015. Refer to Note 25 for further details.

Movements in shares

The movement during the reporting period in the number of ordinary shares in QMS Media Limited held, directly, indirectly or beneficially, by each key management person, including their related parties, is as follows:

Held at

inception Received on

exercise of Options Other changes* Held at 30 June

2015

Adam Trevena - - 1,250,000 1,250,000

Barclay Nettlefold^ - - 45,059,236 45,059,236

David Edmonds - - 1,375,000 1,375,000

John O’Neill - - 5,961,538 5,961,538

Malcolm Pearce - - 531,250 531,250

Mark Rowswell - - 500,000 500,000

Peter Cargin - - 153,846 153,846

Sara Lappage - - 312,500 312,500

Steven Danaher - - 1,200,000 1,200,000

Wayne Stevenson - - 769,230 769,230

* Other changes represent shares that were purchased or sold during the period

^ Barclay Nettlefold has a secured interest in 6,950,000 shares via a limited recourse loan provided to certain employees to acquire shares in QMS Media Limited

This directors’ report is made out in accordance with a resolution of the directors:

Wayne Stevenson

Chairman

29 September 2015

Melbourne

QMS Media Limited Corporate governance statement 30 June 2015

21

The Board of Directors of the Company has overall responsibility for corporate governance, including establishing the corporate governance framework. Accordingly, the Board has created a framework for managing the Company, including adopting relevant internal controls, risk management processes and corporate governance policies and practices which it believes are appropriate for the business and which are designed to promote the responsible management and conduct of the Company.

The Company has also taken into account the guidelines published by the ASX Corporate Governance Council as well as its corporate governance principles and recommendations.

The Company’s corporate governance practices were progressively implemented throughout the year ended 30 June 2015. Various aspects of the Company’s corporate governance practices are discussed within this statement. For further information on corporate governance policies adopted by the Company, refer to our website www.qmsmedia.com

The Board aims to build sustainable value for shareholders whilst protecting the assets and reputation of the Company. The Board has adopted a formal Charter which sets out the functions and responsibilities of the Board, its structure and governance requirements. Under the Board Charter, the overall functions of the Board are to:

(i) Set the direction, goals and objectives of the Company;

(ii) Monitor the implementation of those policies, strategies and financial objectives and provide effective oversight of the Company;

(iii) Review and monitor the principal risks of the Company, the system of internal control and compliance, and adherence to regulatory and ethical standards;

(iv) Approve and monitor processes that provide financial control and accountability and which ensure accurate and timely financial reporting, including approval of dividends, financial results, budgets and strategic plans, major capital expenditure, acquisitions and divestments;

(v) Appoint and monitor the performance of Directors and officers of the Company; and

(vi) Act as an effective interface with the Company’s shareholders and other stakeholders.

To ensure that the Board is able to effectively fulfill its responsibilities, it has established guidelines for the nomination and selection of Directors and for the operations of the Board.

The responsibility for the operation and administration of the Company is delegated by the Board to Senior Management. The Board ensures that this team is appropriately qualified and experienced to discharge its responsibilities and has in place procedures to assess the performance of the Senior Management team.

Whilst at all times the Board retains full responsibility for guiding and monitoring the Company, in discharging its stewardship two specialist sub-committees have been established to focus on particular responsibilities and provide informed guidance and feedback to the Board.


22

The Audit and Risk Management Committee’s role is to assist the Board in fulfilling its responsibilities for corporate governance and oversight of the Company’s financial reporting, internal control structure, risk management systems and internal and external audit functions.

Key responsibilities

The Audit and Risk Management Committee’s key responsibilities and functions are to assist the Board in fulfilling its responsibilities to:

(i) oversee the financial reporting process, the system of internal control relating to all matters affecting the Company’s financial performance, the internal and external audit process, and the process for monitoring compliance with laws and regulations and the Company’s Code of Conduct;

(ii) develop and ensure the effective implementation of appropriate ethical standards and management of the Company and the conduct of its business;

(iii) review and monitor the effectiveness of the Company’s risk management strategies as well as the adequacy of the Company’s insurance arrangements; and

(iv) review and oversee any related party transactions.

As set out in its Charter, the Audit and Risk Management Committee comprises at least three members, the majority of whom are independent non-executive directors. The chair of the committee is an independent director who is not the Chair of the Board.

The Remuneration, Nomination and Corporate Governance (RNCG) Committee’s role is to support and advise the Board in fulfilling its responsibilities to shareholders, employees and other stakeholders of the Company in relation to governance and oversight of the Company’s remuneration and nomination policies and practices that enable it to attract and retain directors and senior management and appropriately align their interests with those of key stakeholders.

Key responsibilities

The RNCG Committee’s key responsibilities and functions are to ensure that:

(i) directors and senior management of the Company are remunerated fairly and appropriately;

(ii) remuneration policies and outcomes strike an appropriate balance between the interests of the Company’s shareholders and rewarding the Company’s executives and employees in order to secure the long term benefits of their energy and loyalty;

(iii) human resources practice and policies are consistent with and complementary to the strategic direction and objectives of the Company;

(iv) Board and Committee composition reflects appropriate skills expertise and diversity;

(v) Proper succession plans are in place for directors and senior management; and

(vi) Appropriate corporate governance policies are implemented and that Company performance against corporate governance policies is critically reviewed.

As set out in its Charter, the RNCG Committee comprises at least three members, the majority of whom are independent directors.


23

Membership of Board committees during the year and as at the date of this report is set out below.

Remuneration,

Nomination and

Corporate

Governance

Committee

Audit and Risk

Management

Committee

Wayne Stevenson, Independent Non-Executive Chairman Chair Member

Barclay Nettlefold, Chief Executive and Executive Director - -

Robert Alexander, Independent Non-Executive Director - Chair

Anne Parsons, Independent Non-Executive Director Member -

David Edmonds, Executive Director Member Member

Each director’s relevant qualifications and experience are listed at pages 12 to 13 of this Annual Report.

Attendance at Committee Meetings

The Company was formed on the 25 November 2014. There were five Board meetings and one Audit and Risk Management Committee meeting held during the year. These meetings were attended by all relevant directors. There were no Remuneration, Nomination & Corporate Governance Committee meetings held during the period.

The Board has delegated to the Chief Executive Officer authority and power to manage the Company and its businesses within levels of authority specified by the Board from time to time. The Chief Executive Officer may delegate aspects of his or her authority and power but remains accountable to the Board for the Company’s performance and is required to report regularly to the Board on the progress being made by the Company’s business units.

The respective roles and responsibilities of the Board and management, including those matters expressly reserved to the Board and those delegated to management, are set out in the Board Charter.

The Chief Executive Officer’s role includes:

(i) responsibility for the effective leadership of the management team;

(ii) the development of strategic objectives for the business; and

(iii) the day-to-day management of the Company’s operations.


24

The Board Charter sets out guidelines and thresholds of materiality for the purpose of determining independence of Directors in accordance with the ASX Recommendations. The Board considers an Independent Director to be a Non-Executive Director who is not a member of the Company’s management and who is free of any business or other relationship which could materially interfere with, or reasonably be perceived to interfere with the independent exercise of judgement.

The Board considers thresholds of materiality for the purpose of determining “independence” on a case-by-case basis, having regard to both the quantitative and qualitative principles. The Board reviews the independence of each Director in light of interests disclosed to the Board from time to time. Refer to the Company’s website for a specific definition of director independence.

The Board considers that each of Wayne Stevenson, Robert Alexander and Anne Parsons is free from any business or other relationship that could materially interfere with, or reasonably be perceived to interfere with, the independent exercise of the Director’s judgement and is able to fulfil the role of independent Director for the purpose of the ASX Recommendations.

Barclay Nettlefold and David Edmonds are currently considered by the Board not to be independent. Barclay Nettlefold is currently the Chief Executive Officer and holder of approx. 17.8% of the Company’s shares. David Edmonds is employed by the company in an executive capacity as Director of Corporate and Legal of the Company.

QMS’s inaugural AGM will be held on 26 November 2015. The Company’s external auditor, KPMG, has indicated that they will attend the AGM and will be available to answer questions from shareholders relevant to the audit of the financial report for the financial period ended 30 June 2015.

The Company has adopted a number of key policies, full copies of which are available on the website.

The Board recognises the need to observe the highest standard of corporate practice and business conduct. Accordingly, the Board has adopted a Code of Conduct which is based on the Company’s core values and the expectations of all of our stakeholders.

The Company is committed to maintaining ethical standards in the conduct of its business in order to:

(i) Promote standards of responsibility and professional conduct of its directors and employees;

(ii) Promote a healthy, respectful and positive workplace environment; and

(iii) Support our business reputation and corporate image in the wider community.

The Code applies to the Company and all of its subsidiaries and all employees are expected to understand the principles of the Code and uphold its values.


25

Continuous Disclosure

The Company has adopted a set of procedures and guidelines to ensure that it complies with its continuous disclosure obligations in accordance with all applicable legal and regulatory requirements, including the Corporations Act 2001 and the Listing Rules of the Australian Securities Exchange (ASX).

The Continuous Disclosure Policy sets out procedures which are aimed at ensuring that Directors and management are aware and fulfill their obligations in relation to the timely disclosure of price sensitive information. Continuous disclosure announcements are made to the ASX and are available on the Company’s website.

Shareholder Communication

The Board’s aim is to ensure that Shareholders are provided with sufficient information to assess the performance of the Company and that they are informed of all major developments affecting the state of affairs of the Company.

The Company’s Shareholder Communication Policy recognises that interaction with shareholders goes beyond its strict legal obligations and includes market briefings, annual reports, shareholder meetings, newsletters, and other shareholder communications, its website and media releases.

The Company’s website contains relevant information for Shareholders, including announcements lodged with the ASX by the Company (including all financial reports and annual reports), press releases, key policies and terms of reference for the Board and its Committees and other material relevant to the Company’s shareholders.

The Company is committed to an inclusive and diverse workplace and acknowledges the positive outcomes and benefits which can be achieved through embracing a diverse workforce.

The Company aims to ensure that:

(i) Its culture at all levels supports all aspects of diversity, while maintaining a high performance culture;

(ii) Recruitment selection and promotion practices are appropriately structured to attract and consider a diverse range of candidates and avoid any conscious or unconscious bias;

(iii) Its programs and processes are designed to develop a broader and more diverse pool of employees and support domestic responsibilities;

(iv) Equality is at the forefront of conscious behaviours and action is taken against discriminatory behaviours; and

(v) Objectives are set on an annual basis to improve diversity and measure such improvement.

Gender diversity

As at 30 June 2015, the proportion of women employed by the Group was as follows:

(i) Board of Directors 20%

(ii) Key Management Personnel 14%

(iii) Total Company Representation 35%


26

The Company has adopted a Securities Trading Policy for dealing in securities which the prohibited type of conduct in relation to dealings in securities under the Corporations Act and establishes a best practice procedure in relation to dealing in shares by Directors and employees.

The policy regulates dealings in securities to mininise the risk of transactions breaching, or potentially breaching, the prohibitions on insider trading contained in the Corporations Act 2001 and aims to increase transparency with respect to dealings in securities in the Company.

The Company’s corporate governance practices, and the extent to which the Company has followed the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations (3rd edition) in 2014, is set out below. Details on compliance with the Corporate Governance Principles and Recommendations relate to the period commencing on 29 June 2015 (the date the Company was admitted to the Official list of the ASX), unless specified otherwise.

Recommendation Comply

Principle 1 – Lay solid foundations for management and oversight

1.1 A listed entity should disclose:

(a) the respective roles and responsibilities of its Board and management; and

(b) those matters expressly reserved to the Board and those delegated to management.

Yes

1.2 A listed entity should:

(a) undertake appropriate checks before appointing a person, or putting forward to security

holders a candidate for election, as a director; and

(b) provide security holders with all material information in its possession relevant to a

decision on whether or not to elect or re-elect a director.

Yes

1.3 A listed entity should have a written agreement with each director and senior executive

setting out the terms of their appointment.

Yes

1.4 The Company secretary of a listed entity should be accountable directly to the Board,

through the chair, on all matters to do with the proper functioning of the Board.

Yes


27



(a) have a diversity policy which includes requirements for the Board or a relevant committee

of the Board to set measurable objectives for achieving gender diversity and to assess

annually both the objectives and the entity’s progress in achieving them;

(b) disclose that policy or a summary of it; and

(c) disclose as at the end of each reporting period the measurable objectives for achieving

gender diversity set by the Board or a relevant committee of the Board in accordance

with the entity’s diversity policy and its progress towards achieving them, and either:

(iv) the respective proportions of men and women on the Board, in senior executive

positions and across the whole organisation (including how the entity has defined

“senior executive” for these purposes); or

(v) if the entity is a “relevant employer” under the Workplace Gender Equality Act, the

entity’s most recent “Gender Equality Indicators”, as defined in and published under

that Act.

Yes


(a) have and disclose a process for periodically evaluating the performance of the Board, its

committees and individual directors; and

(b) disclose, in relation to each reporting period, whether a performance evaluation was

undertaken in the reporting period in accordance with that process.

Will

comply1


(a) have and disclose a process for periodically evaluating the performance of its senior

executives; and

(b) disclose, in relation to each reporting period, whether a performance evaluation was

undertaken in the reporting period in accordance with that process.

Will

comply1

1 The Company was admitted to the official list of the ASX on 29 June 2015. The relevant period for assessment of the performance of the board and senior executives was therefore two days. In the circumstances no evaluation of the performance of the board, its committees, individual directors and senior executives was conducted for the relevant period. Assessments of performance will be conducted during FY16.


28


Principle 2 – Structure the Board to add value

2.1 The Board of a listed entity should:

(a) have a nomination committee which:

(i) has at least three members, a majority of whom are independent directors; and

(ii) is chaired by an independent director, and disclose:

(iii) the charter of the committee;

(iv) the members of the committee; and

(v) as at the end of each reporting period, the number of times the committee met

throughout the period and the individual attendances of the members at those

meetings; or

(b) if it does not have a nomination committee, disclose that fact and the processes it

employs to address Board succession issues and to ensure that the Board has the

appropriate balance of skills, knowledge, experience, independence and diversity to

enable it to discharge its duties and responsibilities effectively.

Yes

2.2 A listed entity should have and disclose a Board skills matrix setting out the mix of skills

and diversity that the Board currently has or is looking to achieve in its membership.

Yes


(a) the names of the directors considered by the Board to be independent directors;

(b) if a director has an interest, position, association or relationship relevant to assessing

independence, but the Board is of the opinion that it does not compromise the

independence of the director, the nature of the interest, position, association or

relationship in question and an explanation of why the Board is of that opinion; and

(c) the length of service of each director.

Yes

2.4 A majority of the Board of a listed entity should be independent directors. Yes

2.5 The chair of the Board of a listed entity should be an independent director and, in

particular, should not be the same person as the CEO of the entity.

Yes

2.6 A listed entity should have a program for inducting new directors and provide

appropriate professional development opportunities for directors to develop and

maintain the skills and knowledge needed to perform their role as directors effectively.

Yes

Principle 3 – Act ethically and responsibly


(a) have a code of conduct for its directors, senior executives and employees; and

(b) disclose the code or a summary of it.

Yes


29


Principle 4 – Safeguard integrity in corporate reporting


(a) have an audit committee which:

(i) has at least three members, all of whom are non-executive directors and a majority of whom are independent directors1; and

(ii) is chaired by an independent director, who is not the chair of the Board, and disclose:


(iv) the relevant qualifications and experience of the members of the committee; and

(v) in relation to each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings.

(b) if it does not have an audit committee, disclose that fact and the processes it employs

that independently verify and safeguard the integrity of its corporate reporting, including

the processes for the appointment and removal of the external auditor and the rotation of

the audit engagement partner.

Yes

4.2 The Board of a listed entity should, before it approves the entity’s financial

statements for a financial period, receive from its CEO and CFO a declaration that, in their

opinion, the financial records of the entity have been properly maintained and that the

financial statements comply with the appropriate accounting standards and give a true and

fair view of the financial position and performance of the entity and that the opinion has been

formed on the basis of a sound system of risk management and internal control which is

operating effectively.

Yes

4.3 A listed entity that has an AGM should ensure that its external auditor attends its AGM

and is available to answer questions from security holders relevant to the audit.

Will

comply

1 The committee is comprised of two non-executive directors and one executive director. The Company considered that with the appointment of the non-executive directors taking effect on 10 April 2015 it was appropriate for one executive director to sit on the committee until the non-executive directors are fully familiar with the Company’s business. The Company intends for the committee to be comprised only of non-executive directors in due course.


30


Principle 5 – Make timely and balanced disclosure


(a) have a written policy for complying with its continuous disclosure obligations under the

Listing Rules; and

(b) disclose that policy or a summary of it.

Yes

Principle 6 – Respect the rights of security holders

6.1 A listed entity should provide information about itself and its governance to investors via

its website.

Yes

6.2 A listed entity should design and implement an investor relations program to facilitate

effective two-way communication with investors.

Will

comply

6.3 A listed entity should disclose the policies and processes it has in place to facilitate and

encourage participation at meetings of security holders

Yes

6.4 A listed entity should give security holders the option to receive communications from,

and send communications to, the entity and its security registry electronically.

Yes

Principle 7 – Recognise and manage risk


(a) have a committee or committees to oversee risk, each of which:


(ii) is chaired by an independent Chair, and disclose:




throughout the period and the individual attendances of the members at those

meetings; or

(b) if it does not have a risk committee or committees that satisfy (a) above, disclose that

fact and the processes it employs for overseeing the entity’s risk management

framework.

Yes


31


7.2 The Board or a committee of the Board should:

(a) review the entity’s risk management framework at least annually to satisfy itself that it

continues to be sound; and

(b) disclose, in relation to each reporting period, whether such review has taken place.

Will

comply


(a) if it has an internal audit function, how the function is structured and what role it

performs; or

(b) if it does not have an internal audit function, that fact and the processes it employs for

evaluating and continually improving the effectiveness of its risk management and

internal control processes.

Yes

7.4 A listed entity should disclose whether it has any material exposure to economic,

environmental and social sustainability risks and, if it does, how it manages or intends to

manage those risks.

Yes

Principle 8 – Remunerate fairly and responsibly


(a) have a remuneration committee which:


(ii) is chaired by an independent director, and disclose:




throughout the period and the individual attendances of the members at those meetings;

or

(b) if it does not have a remuneration committee, disclose that fact and the processes it

employs for setting the level and composition of remuneration for directors and senior

executives and ensuring that such remuneration is appropriate and not excessive.

Yes

8.2 A listed entity should separately disclose its policies and practices regarding the

remuneration of non-executive directors and the remuneration of executive directors and

other senior executives.

Yes

8.3 A listed entity which has an equity-based remuneration scheme should:

(a) have a policy on whether participants are permitted to enter into transactions

(whether through the use of derivatives or otherwise) which limit the economic risk of

participating in the scheme; and

(b) disclose that policy or a summary of it.

Will

comply

QMS Media Limited Consolidated statement of profit or loss and other comprehensive income 30 June 2015

32

Note 2015

$'000

Revenue 6(a) 4,095

Cost of sales (1,585)

Gross profit 2,510

Advertising and marketing expenses (47)

Consultancy fees (582)

Employee benefits expense (648)

Legal and professional fees (434)

IPO related expenses 6(b) (1,724)

Costs associated with acquisitions (1,040)

Other expenses (372)

Depreciation expense 12(a) (70)

Amortisation expense 13(a) (182)

Operating profit/(loss) (2,589)

Finance income 29

Finance costs (3,077)

Net finance costs 7 (3,048)

Profit/(loss) before tax (5,637)

Income tax (expense)/benefit 9 743

Profit/(loss) after tax (4,894)

Profit/(loss) attributable to:

Owners of the Company (4,844)

Non-controlling interests (50)

(4,894)

Other comprehensive income/(loss)Items that may be reclassified to profit or loss:

Foreign currency translation differences (11) Total comprehensive income/(loss) net of tax (11)

Total comprehensive income/(loss) attributable to:

Owners of the Company (4,855)

Non-controlling interests (50)

Total comprehensive income/(loss) for the period (4,905)

Earnings per share

Basic and diluted earnings per share (dollars) 8 (0.33)

The Notes on pages 37 to 70 are an integral part of these consolidated financial statements.

There is no prior year comparative results as the Company was incorporated on 25 November 2014.

QMS Media Limited Consolidated statement of financial position 30 June 2015

33

Note 2015$'000

Assets

Cash and cash equivalents 21,411

Trade and other receivables 10 9,934

Inventories 616

Other current assets 11 7,947

Total current assets 39,908

Deferred tax assets 9(d) 2,697

Property, plant and equipment 12 18,960

Other non-current assets 11 704

Intangible assets and goodwill 13 89,315

Total non-current assets 111,676

Total assets 151,584

Liabilities

Trade and other payables 10,310

Loans and borrowings 17 3,282

Deferred and contingent consideration 18 13,376

Current tax liabilities 813

Provisions 19 504

Deferred income / revenue 594

Other liabilities 4,079

Total current liabilities 32,958

Deferred and contingent consideration 18 8,153

Provisions 19 2,706

Deferred tax liabilities 9(d) 915

Total non-current liabilities 11,774

Total liabilities 44,732

Net assets 106,852

Equity

Share capital 15(a) 116,243

Reserves (4,497)

Retained earnings (4,844)

Total equity attributable to equity holders of the Company 106,902

Non-controlling interest (50)

Total equity 106,852



QMS Media Limited Consolidated statement of changes in equity 30 June 2015

34

Note

Share

capital

Translation

reserve

Merger

reserve

Retained

earnings Total

Non-

controlling

interests Total equity

$'000 $'000 $'000 $'000 $'000 $'000 $'000

Total comprehensive income

Profit or loss - - - (4,844) (4,844) (50) (4,894)

Other comprehensive income - (11) - (11) - (11)

Total comprehensive income - (11) - (4,844) (4,855) (50) (4,905)

Transactions with owners of the

Company

Contributions and distributions

Issue of ordinary shares 120,196 - - - 120,196 - 120,196

Share issue costs (5,265) - - - (5,265) - (5,265)

Deferred tax expense 9(d) 1,312 - - - 1,312 - 1,312

Total contributions and distributions 116,243 - - - 116,243 - 116,243

Changes in ownership interests

Acquisition of subsidiary with common

control 15(d) - - (4,486) - (4,486) - (4,486)

Total changes in ownership interests - - (4,486) - (4,486) - (4,486)

Total transactions with owners of

the Company 15(a) 116,243 - (4,486) - 111,757 - 111,757 Balance at 30 June 2015 116,243 (11) (4,486) (4,844) 106,902 (50) 106,852

Attributable to equity holders of the Company



QMS Media Limited Consolidated statement of cash flows 30 June 2015

35

Note 2015

$'000

Cash flows from operating activities

Cash receipts from customers 5,267

Cash paid to suppliers and employees (2,489)

Interest paid (12)

Income taxes paid -

Net cash from operating activities 27 2,766

Cash flows from investing activities

Acquisition of subsidiaries net of cash acquired 22(f) (68,255)

Acquisition of property, plant and equipment (991)

Deposits paid on intangible assets (1,624)

Acquisition of intangible assets (2,538)

Payments of acquisition costs (1,039)

Net cash used in investing activities (74,447)

Cash flows from financing activities

Proceeds from issue of share capital 95,003

Proceeds from issue of convertible notes 9,500

Transaction costs related to issue of shares (5,365)

Repayment of related party loans (3,099)

Repayment of borrowings (2,936)

Net cash from/(used in) financing activities 93,103

Net decrease in cash and cash equivalents 21,422

Cash and cash equivalents at inception -

Effect of movements in exchange rates on cash held (11)Cash and cash equivalents at 30 June 2015 21,411



QMS Media Limited Index to Notes to the consolidated financial statements 30 June 2015

36

1. Reporting entity 37

2. Basis of accounting 37

3. Functional and presentation currency 37

4. Use of judgements and estimates 38

5. Operating segments 38

6. Income and expenses 38

7. Net finance costs 39

8. Earnings per share 39

9. Income taxes 40

10. Trade and other receivables 42

11. Other assets 42

12. Property, plant and equipment 42

13. Intangible assets and goodwill 43

14. Equity-accounted investees 44

15. Capital and reserves 44

16. Capital management 45

17. Loans and borrowings 45

18. Deferred and contingent consideration 46

19. Provisions 47

20. Financial instruments – Fair values and risk management 47

21. List of subsidiaries and equity accounted investments 51

22. Acquisition of subsidiaries 52

23. Operating leases 57

24. Capital Commitments 57

25. Related parties 57

26. Subsequent events 59

27. Reconciliation of cash flows from operating activities 60

28. Auditors’ remuneration 60

29. Parent entity disclosures 61

30. Significant accounting policies 61

31. New standards and interpretations not yet adopted 69

QMS Media Limited Notes to the consolidated financial statements 30 June 2015

37

QMS Media Limited (the “Company”) is a company domiciled in Australia. The Company was incorporated on 25 November 2014. The consolidated financial statements comprise the Company and its subsidiaries (collectively "the Group"). This is the first set of financial statements for the Group and results are presented from 25 November 2014 to 30 June 2015. The Company was admitted to the Official List of the Australian Stock Exchange on 29 June 2015 after the completion of an Initial Public Offering.

The Company’s registered business address is at Level 5, 180 Albert Road, South Melbourne, VIC 3205.

The Group is a for-profit entity and is primarily involved in the provision of outdoor advertising and media services over a portfolio of owned and represented static and digital billboards throughout Australia and overseas.

(a) Statement of compliance

The consolidated financial statements are general purpose financial statements which have been prepared in accordance with Australian Accounting Standards (AASBs) adopted by the Australian Accounting Standards Board (AASB) and the Corporations Act 2001. The consolidated financial statements comply with International Financial Reporting Standards (IFRS) adopted by the International Accounting Standards Board (IASB).

The consolidated financial statements have been prepared on a going concern basis, which assumes that the Group will be able to meet its obligations associated with all financial liabilities.

These obligations include the payment of future contingent consideration and asset acquisitions. The Company has recognised a net loss after tax of $4,894,000 for the period ended 30 June 2015. The Company expects to use existing cash reserves and operating cash flows as well as borrowing facilities available and committed, to enable it to settle its future obligations and continue expenditure on capital development and on-going operating expenditure.

The consolidated financial statements were authorised for issue by the Board of Directors on 28 September 2015. Details of the Group’s accounting policies are included in Notes 30 and 31.

(b) Basis of measurement

The consolidated financial statements have been prepared on the historical cost basis except for the following material items, which are measured on an alternative basis on each reporting date.

Items Measurement basis

Deferred and contingent consideration assumed in a business combination

Fair value

These consolidated financial statements are presented in Australian dollars, which is the Company’s functional currency.

The Company is of a kind referred to in ASIC Class Order 98/100 dated 10 July 1998 and in accordance with that Class Order, all financial information presented in Australian dollars has been rounded to the nearest thousand unless otherwise stated.


38

In preparing these consolidated financial statements, management has made judgements, estimates and assumptions that affect the application of the Group’s accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised prospectively.

Information about critical judgements, assumptions and estimation uncertainties that have a significant risk of a material adjustment within the period ending 30 June 2015 are included in the following notes:

Note 9(d) – Recognition of deferred tax assets and availability of future taxable profits;

Note 20(b) – Measurement of deferred and contingent consideration; and

Note 22 – Acquisition of subsidiaries, fair value measured on a provisional basis.

Measurement of fair values

A number of the Group’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities.

The Chief Financial Officer (“CFO”) has overall responsibility for overseeing all significant fair value measurements.

The CFO regularly reviews significant unobservable inputs and valuation adjustments.

Significant valuation issues are reported to the Audit and Risk Management Committee.

When measuring the fair value of an asset or a liability, the Group uses market observable data as far as possible. For further details regarding the assessment of fair value refer to Note 20.

The Group operates in one market segment being outdoor advertising. Segment information reported to the Chief Executive Officer, who is considered the chief operating decision maker of the Company, is substantially similar to information provided in this financial report.

(a) Revenue

2015

$'000

Sale of media and production services 3,121

Gain on remaining interest acquired in associates 795

Other income 179

4,095

(b) IPO related expenses

2015

$'000

ASX listing fees 82

Stamp duty 386

Legal, professional and other 1,256

1,724


39

2015

$'000

Interest income 29

Finance income 29

Interest expense (11)

Unwind of discount on deferred and contingent consideration (36)

Brokerage costs on convertible note (530)

Conversion of convertible notes to equity (2,500)

Finance costs (3,077) Net finance costs recognised in profit or loss (3,048)

Basic and dilutive earnings per share

The calculation of basic dilutive earnings per share has been based on the following loss attributable to ordinary shareholders and weighted-average number of ordinary shares outstanding.

(i) Loss attributable to ordinary shareholders (basic)

2015

$'000

Loss for the period, attributable to the owners of the Company (4,844)

Loss attributable to ordinary shareholders (4,844)

(ii) Weighted-average number of ordinary shares (basic)

2015

$'000

Issued ordinary shares at inception -

Effect of shares issued in November 2014 1

Effect of shares issued in March 2015 11,948

Effect of shares issued related to conversion of note 355

Effect of shares issued in June 2015 2,594

Weighted average number of ordinary shares at 30 June 2015 14,898


40

(a) Amounts recognised in profit or loss

2015

$'000

Current tax (expense)/benefit

Current period (20)

(20)

Deferred tax (expense)/benefitChange in recognised deductible temporary differences 9(d) 763

763

Tax (expense)/benefit 743

Tax expense from continuing operations excluded the Group’s share of tax expense of the Group’s equity-accounted investees of $59,000, which has been included in ‘share of profit of equity-accounted investees, net of tax’.

The Group believes that its accruals for tax liabilities are adequate based on its assessment of many factors, including interpretations of tax law.

(b) Amounts recognised directly in equity

Before tax

Tax (expense)

/benefit Net of tax

$'000 $'000 $'000

Share issue costs 5,265 1,312 3,953

2015

(c) Reconciliation of effective tax rate

2015

$'000

Profit/(loss) before tax (5,638)

Prima facie income tax expense/(benefit) at 30% (1,691)

Add/(less) tax effect of:

Non-deductible expenses 1,225

Non-assessable income (292)

Other 15

Income tax expense/(benefit) charged to income statement (743)

Effective tax rate (13%)


41

(d) Movement in deferred tax balances

Net balance at

inception

Recognised in

profit or loss

Recognised

directly in equity

Acquired in

business

combinations Net

Deferred tax

assets

Deferred tax

liabilities

$'000 $'000 $'000 $'000 $'000 $'000 $'000

Property, plant and

equipment - (4) - (727) (731) 5 (736)

Intangible assets - - - (110) (110) - (110)

Employee benefits - (2) - 279 277 277 -

Provisions - 8 - 265 273 342 (69)

Other items - 231 281 - 512 512 -

IPO costs - 530 1,031 - 1,561 1,561 -

Carry forward tax loss - - - - - - -

Net tax liabilities (assets) - 763 1,312 (293) 1,782 2,697 (915)

Balance at 30 June 2015

The Group has $1,044,806 of deferred tax losses that it currently has not recognised relating to pre-acquisition tax losses.


42

2015

$'000

Trade and other receivables 9,986

Less: Provision for doubtful debts (52)

9,934

Current 9,934

Non-current -

9,934

2015

$'000

Prepayments 2,954

Options on acquisition 4,373

Other 1,324

Total Other Assets 8,651

Current 7,947

Non-current 704

8,651

(a) Reconciliation of carrying amount

Note

Land and

buildings

Plant and

equipment

Fixtures and

fittings

Under con-

struction Total

Cost $'000 $'000 $'000 $'000 $'000

Balance at inception - - - - -

Acquisitions through business

combinations 22(f) 5,576 8,559 39 214 14,388

Acquisitions through common control

transactions 15(d) - 1,446 - - 1,446

Other additions - 3,168 29 - 3,197

Disposals - (11) (5) - (16) Balance at 30 June 2015 5,576 13,162 63 214 19,015

Accumulated depreciation


Depreciation (2) (67) (1) - (70)

Disposals - 11 4 - 15 Balance at 30 June 2015 (2) (56) 3 - (55)

Carrying amounts

at 30 June 2015 5,574 13,106 66 214 18,960


43

(b) Leased plant and machinery

The Company leases production and printing equipment under a number of finance leases which are recorded on the balance sheet.

The Company has also entered into operating leases/equipment rental agreements. Where substantially all the risks and benefits remain with the lessor, lease costs/rental are charged as expenses in the period in which they are incurred.

As at 30 June 2015, the net carrying amount of secured leased equipment was $518,000.

(c) Security

At 30 June 2015, properties with a carrying amount of $5,574,000 were subject to a registered debenture that forms security for bank loans.

(d) Property, plant and equipment under construction

As new static and digital billboard sites are developed, the costs to construct (including permits, physical structures and LED panels) are capitalised to the balance sheet. Structures are depreciated when installed and ready for use.

(a) Reconciliation of carrying amount

Note Goodwill Site Leases

Development

costs Other Total

Cost $'000 $'000 $'000 $'000 $'000


Acquisitions through business

combinations 22(f) 59,005 14,963 - 1,348 75,316

Acquisitions through common control

transactions 15(d) - 440 - - 440

Other acquisitions - 13,090 531 120 13,741

Effect of movements in exchange rates - - - - - Balance at 30 June 2015 59,005 28,493 531 1,468 89,497

Accumulated amortisation


Amortisation - (138) - (44) (182)

Effect of movements in exchange rates - - - - - Balance at 30 June 2015 - (138) - (44) (182)

Carrying amounts

At 30 June 2015 59,005 28,355 531 1,424 89,315

There was no recorded impairment as at 30 June 2015 in relation to any recognised intangible assets or goodwill.

Goodwill reflects the amounts recognised for acquisitions made in accordance with AASB 3. Common control transactions have been recognised at book value and are reflected in the merger reserve. Refer to Note 15(d).

(b) Impairment test

Goodwill is required to be tested for impairment annually or more frequently where there is an indication of possible impairment (a triggering event). Given the Company only recorded goodwill on acquisitions made on 23 June 2015 and listed on the Australian Stock Exchange on 29 June 2015, the Company has not performed the annual goodwill impairment test and has instead performed indicator-based impairment testing. Based on the Company's evaluation, there are no indicators of impairment.


44

Associates

During the period the Group held 50% interest in QMS Australia Pty Ltd for the period 19 March 2015 to 22 June 2015 which was treated as an equity accounted investment. On 23 June 2015, the Group’s equity interest in QMS Australia Pty Ltd increased from 50% to 100% which resulted in a step-up gain on acquisition of $795,000. The Group holds an investment in Titan Media NZ Ltd which is classified as an investment in associate. No further disclosures have been made on the basis that the investment is not material.

(a) Share capital

Ordinary shares Value

2015 2015

'000 $'000

On issue at inception - -

Issued for cash 165,935 95,001

Conversion of convertible notes 19,231 12,500

Issued in business combination 66,435 12,695

Share issue costs (net of tax) - (3,953)

In issue at 30 June 2015 251,601 116,243

(i) Ordinary shares

The holders of these shares are entitled to receive dividends as declared from time to time, and are entitled to one vote per share at general meetings of the Company. The Company’s share capital consists of ordinary shares.

(b) Nature and purpose of reserves

(i) Translation reserve

The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations.

(i) Merger reserve

Where the Company acquires an entity that is classified as a common control transaction, the Company has made an accounting policy choice to recognise the assets acquired and liabilities assumed using book values, with an adjustment made to a separate component of equity (the merger reserve) to reflect any difference between the consideration paid and the capital of the acquiree.

(c) Dividends

No dividends were declared or paid by the Company during or since the end of the financial period.


45

(d) Merger reserve

Note DOM Group

Riverview

Signage Trust Total

$'000 $'000 $'000

Equity instruments - 5,150 5,150 Total consideration transferred - 5,150 5,150

Property, plant and equipment 12(a) 929 517 1,446

Intangible assets 13(a) 440 - 440

Trade & other receivables 2,630 425 3,055

Cash and cash equivalents 49 3 52

Deferred tax assets/(liabilities) 4 - 4

Loans and borrowings (3,908) (361) (4,269)

Trade and other payables (34) (34)

Total identifiable net assets acquired 144 550 694

Consideration transferred - 5,150 5,150

Less: Identifiable net assets 144 550 694

Less: Recognition of make good provision - (30) (30)

Merger Reserve (144) 4,630 4,486

The Company’s principal sources of funds are cash flows from operations and cash reserves on hand from the Initial Public Offering. The Group may finance its ongoing operations with operating cash flows, bank borrowings or a combination of both.

The Group’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Management monitors the return on capital as well as the level of dividends to ordinary shareholders.

The Board of directors seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the advantages and security afforded by a sound capital position.

2015

Current liabilities $'000

Bank loans & borrowings 2,961

Finance lease liabilities 321

3,282

On 23 March 2015, the Company issued 1,000 Convertible Notes with a face value of $10,000 each which raised $9,500,000 net of transaction costs. Under the Note Conversion Deed, each note accrued interest from the issue date until the earliest of the conversion date, being the date shares are allotted on completion of the Initial Public Offering, or the redemption date, being 12 months after the issue date.


46

The amount of interest payable on each note accrued daily except in the case that the note converted to shares, in which case no accrued and unpaid interest was payable. The conversion price was based on a 20% discount to the price of the shares issued by the Company as part of the Initial Public Offering.

Upon issue, the Convertible Notes were classified as a debt instrument. The Group successfully listed on the ASX on 29 June 2015 which resulted in a conversion of the Convertible Notes to shares in the Company at a 20% discount. The resulting discount on the issue price of $2,500,000 has been classified as interest expense and charged to the income statement as a finance cost.

(a) Terms and debt repayment schedule

Terms and conditions of outstanding loans are as follows.

Currency

Nominal

interest rate

Year of

maturity

Face

value

Carrying

amount

$'000 $'000

Bank loans and borrowings AUD 5.35% - 7.89% 2016 2,961 2,961

Finance lease liabilities AUD 2.62% - 5.32% 2016 321 321Total interest-bearing liabilities 3,282 3,282

2015

(b) Finance lease liabilities

Finance lease liabilities are payable as follows.

Future minimum lease

payments Interest

Present value of

minimum lease

payments

2015 2015 2015

$'000 $'000 $'000

Less than one year 338 17 321

338 17 321

Note 2015 2015

Carrying amount Face value

Current deferred and contingent consideration $'000 $'000

Drive by Media 10,626 10,626

Plexity Holdings 1,600 1,600

Paramount Outdoor 1,150 1,150

13,376 13,376

Non-current deferred and contingent

consideration

Plexity Holdings 2,900 2,900

BMG Australasia 1,552 1,626

Vail Media Book 2,781 3,709

Paramount Outdoor 920 1,150

8,153 9,385

Total deferred and contingent consideration 22(f) 21,529 22,761


47

Drive by Media relates to payments for site leases and related permits. The remaining deferred and contingent consideration relates to the acquisitions of subsidiaries.

Note

Straight-Line

Leasing Make Good

Employee

Entitlements Total

$'000 $'000 $'000 $'000

Balance at inception - - - -

Assumed in a business combination 22(f) 1,370 835 929 3,134

Provisions made during the period 27 - 49 76

Balance at 30 June 2015 1,397 835 978 3,210

Current 14 - 490 504

Non-current 1,383 835 488 2,706

1,397 835 978 3,210

Make Good

As part of the various acquisitions, the Group recognised make good provisions of $835,000, measured on a provisional basis, (see Note 22(d)) in order to return any leased premises and sites to original condition upon termination of the lease should it be expected or likely that these will be required to be paid.

(a) Accounting classifications and fair values

The following table shows the carrying amounts and fair values of financial liabilities, including their levels in the fair value hierarchy. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.

Note

Designated

at fair value Total Level 1 Level 2 Level 3 Total

$'000 $'000 $'000 $'000 $'000 $'000Financial liabilities

measured at fair value

Deferred and contingent

consideration 18 (21,529) (22,761) - (12,926) (9,835) (22,761)

(21,529) (22,761) - (12,926) (9,835) (22,761)

Fair value

(b) Measurement of fair values

(i) Valuation technique

The deferred and contingent consideration on the acquisition to be made by the Company are adjusted to fair value where these payments are due on a date beyond 30 June 2016. The discount factor used for these payments was 12% after tax.


48

Financial instruments measured at fair value

Type Valuation technique

Significant unobservable inputs

Inter-relationship between key unobservable inputs and fair value measurement

Deferred consideration

Where the Company has obligations to pay specified amounts at future dates, the deferred consideration is measured at present value using a risk-adjusted discount rate, with the unwinding of any interest element recognised in profit or loss

Risk-adjusted

discount rate

(12%)

The estimated deferred consideration would increase/decrease if the risk adjusted discount rate is higher or lower.

Contingent consideration

Discounted cash flow based on a valuation model that considers the present value of the expected payment, discounted using a risk-adjusted discount rate. The expected payment is determined by estimating the expected earnings based on the calculation stipulated in the purchase agreements. This estimation is judgemental and is determined by management with reference to past performance and current budget plans.

Risk-adjusted discount rate (12%), forecast earnings

The estimated contingent consideration would increase/decrease if the risk adjusted discount rate or forecast earnings is higher or lower.

(c) Financial Risk Management

(i) Risk Management framework

The Company's activities expose it to a variety of financial risks: market risk (including currency risk, interest rate risk and price risk), credit risk and liquidity risk. The Company's overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Company. The Board and Audit and Risk Management Committee is provided with the authority to manage any identified material risks.

(ii) Credit risk

Credit risk is managed on a Group wide basis. Credit risk arises from cash and cash equivalents, deposits with banks and exposures to agencies and direct clients, including outstanding receivables and committed transactions. The Company has no significant concentrations of credit risk. Ongoing customer credit performance is monitored on a regular basis.

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at 30 June 2015 was:

2015

$'000

Cash and cash equivalents 21,411

Trade and other receivables 9,986

Total 31,397

Impairment

At 30 June 2015, the aging of the trade and other receivables that were not impaired was as follows.

No impairment and bad debts were recognised in respect of trade and other receivables during the period.

2015

$'000

Neither past due nor impaired 718

Due 1 - 30 days 6,731

Due 31 - 90 days 1,241

Due 91 days and more 1,244

9,934


49

(iii) Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation. The Group manages liquidity risk by maintaining adequate cash reserves and available borrowing facilities by continuously monitoring actual and forecast cash flows.

Exposure to liquidity risk

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include estimated interest payments.

Note

Carrying

amount Total

Less than 12

months 1-5 yearsNon-derivative financial $'000 $'000 $'000 $'000

Deferred and contingent

consideration 18 (21,529) (22,761) (13,376) (9,385)

Bank loans and

borrowings 17 (2,961) (2,961) (2,961) -

Finance lease liabilities 17 (321) (338) (338) -

Trade payables (10,309) (10,309) (10,309) -

(35,120) (36,369) (26,984) (9,385)

Contractual cash flows

The Group’s liquidity is dependent upon the Group being able to manage its cash outflows and financing obligations as it continues to expand its operations and therefore Liquidity is an area of risk. The Group has obligations to pay further acquisition consideration as disclosed above and in Note 18 and plans to invest further capital into its asset network as part of its growth strategy. Financing arrangements are in place that are subject to covenant requirements as outlined below. As at the date of the release of the Annual Report, the Group has met its covenant requirements and the forecast cash flows indicate the Group has sufficient liquidity to undertake its strategic capital expenditures. The Group expects to fund part of its capital expenditure from cash flow from operations, and should cash flows from operations not be sufficient, discretionary capital expenditure may be deferred to manage the Group’s liquidity profile.

The banking facilities present at 30 June 2015 are held in the names of various subsidiaries. These facilities were replaced by new, increased banking facilities executed by the Group on 28 July 2015. The limit under the new facility was increased to $10,010,000 and has an expiry date of 31 October 2016. Provided the Company achieves certain targets, a step-up in the facility of a further $2,000,000 will be available.

The new facility agreement contains certain covenants required to be met to ensure there is no default under the facility. A future breach of covenants may require the Group to repay the facilities earlier than the expiry date.

The interest payments on variable interest rate loans in the table above reflect the interest rates at the reporting date and these amounts may change as market interest rates change. The future cash flows on contingent consideration may be different from the amount in the above table as interest rates or the relevant conditions underlying the contingency change. Except for these financial liabilities, it is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at significantly different amounts.


50

(iv) Market risk

Market risk is the risk that changes in market prices – such as foreign exchange rates, interest rates and equity prices – will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

(v) Currency risk

The Company operates internationally and is exposed to foreign exchange transaction risks arising from currency exposures, primarily with respect to the Indonesian Rupiah and New Zealand Dollar. Foreign exchange transaction risk arises when future commercial transactions and recognised assets and liabilities are denominated in a currency that is not the entity's functional currency and net investments in foreign operations. The Group has foreign currency exposure to movements in the AUD/NZD and AUD/IDR exchange rates in consolidating the NZD and IDR net assets of its subsidiaries in those countries at each balance date. The Australian accounting standards require that such movements be booked to the Company's Foreign Currency Translation Reserve (“FCTR”).

No hedging of this exposure is currently undertaken because:

The movements in the FCTR are limited due to the offsetting level of IDR assets and liabilities and NZD assets and liabilities; and

both operations are core to the Group’s business and are not expected to be disposed of and any balance in the FCTR is not expected to be realised within the foreseeable future.

(vi) Interest rate risk

Borrowings at variable interest rates expose the Company to cash flow interest rate risk. The Company's borrowings are all at floating rates, except for the finance lease liabilities. The Board continually monitors the borrowing levels and will adopt an appropriate hedging strategy as required.


51

Set out below is a list of subsidiaries and equity accounted investments of the Group.

Ownership

2015

QMS APAC

MMTB Pty Ltd Australia 100%

MMT Land Pty Ltd Australia 100%

Omnigraphics Australia Pty Ltd Australia 100%

QMS Australia Pty Ltd Australia 100%

QMS Rail Media Pty Ltd Australia 100%

QMS Australian Holdings Pty Ltd Australia 100%

Q Media Pty Ltd Australia 100%

Standout Media Pty Ltd Australia 100%

QMS Insite Media Pte Ltd Singapore 100%

PT INsite Media Indonesia 51%

The Digital Outdoor Group Pty Ltd Australia 50%

DOM Group

Digital Outdoor Media (Aust) Pty Ltd Australia 100%

Digital Outdoor Media (NSW) Pty Ltd Australia 100%

Digital Outdoor Media (QLD) Pty Ltd Australia 100%

Digital Outdoor Media (VIC) Pty Ltd Australia 100%

Digital Outdoor Media (WA) Pty Ltd Australia 100%

Riverview Signage Trust Australia 100%

Riverview Signage Pty Ltd Australia 100%

QMS NZ Holdings Ltd New Zealand 75%

QMS NZ Retail Ltd New Zealand 75%

Other Entities

Paramount Outdoor Pty Ltd Australia 100%

Plexity Holdings Pty Ltd Australia 80%

BMG Australasia Pty Ltd Australia 65%

Ambient Advertising NZ Ltd New Zealand 75%

Equity-accounted Investments

Titan Media Group NZ Ltd New Zealand 38%

Principal place of

business


52

(a) Introduction

The Company was established in November 2014 to aggregate a number of media related assets and businesses. The Company completed the following acquisitions during the period ended 30 June 2015:

QMS APAC Acquisition

The QMS APAC Acquisition, which completed on the 23 June 2015, involved the acquisition of the various entities which constituted the QMS APAC business being:

(i) MMTB Pty Ltd

A specialised display production business based in Brisbane focusing on billboards and building wraps through to exhibitions and event displays. MMTB focuses on supply of the Queensland and NSW markets and together with Omnigraphics provides supply coverage for all major eastern seaboard markets.

(ii) MMT Land Pty Ltd

The owner of the property on which the MMTB business operates.

(iii) Omnigraphics Australia Pty Ltd

Specialised display production business based in Melbourne which operates in a similar manner to MMTB business and with primary focus on the Victorian and NSW markets.

(iv) QMS Australia Pty Ltd (50% interest)

This entity has the ConnectEast concession, as well as a major digital billboard site and two other large format static billboards in Melbourne (Victoria). The Company has already acquired the balance of the 50% interest in this entity.

(v) QMS Rail Media Pty Ltd (a wholly owned subsidiary of QMS Australia Pty Ltd)

This entity holds the VicTrack concession which is a licence to use and develop a number of sites on VicTrack land.

(vi) QMS Australian Holdings Pty Ltd

This entity was non-operating as at 30 June 2015.

(vii) Q Media Pty Ltd

Q Media is the sales arm for all advertising assets of the QMS APAC Group and also acts as sales agents for third parties that outsource sales responsibility.

(viii) Standout Media Pty Ltd

This entity has a major digital billboard in Brisbane and 8 other large format static billboards in capital cities on the eastern seaboard.


53

(ix) PT INsite Media

The QMS APAC business had an economic interest in PT INsite Media, an Indonesian entity which owns a portfolio of advertising assets including large format signage, prime advertising sites at major Indonesian airports and bridge concession signage. It also acts as a sales agency business for other owners of outdoor advertising assets and sells space on those third party advertising assets to advertisers.

As at 30 June 2015, the Company controls and therefore consolidates PT INsite Media, which is domiciled in Indonesia. As at 30 June 2015, the Company had no legal ownership interest in PT INsite Media, however it has been assessed that the Company controls the entity as it is exposed to, and has the rights to variable returns from PT INsite Media via a series of nominee arrangements that were entered into with the shareholders of PT INsite Media. The nominee agreements provide for voting rights, dividends, involvement in key decisions including approvals by the Company.

(x) The Digital Outdoor Group Pty Ltd (50% owned by QMS Australia Pty Ltd)

This entity was non-operating as at 30 June 2015 but has a license with Crown Casino to develop a large format digital sign in the Crown Casino precinct which was installed in September 2015.

Paramount Acquisition

The “Paramount Acquisition” involved the acquisition of Paramount Outdoor Pty Ltd and an option to acquire Vail Media Pty Ltd (“Vail”).

Paramount has rights to 35 operational advertising faces on 27 sites in Perth and its surrounds. All billboards are static.

Vail has rights to a further 10 development sites for 19 advertising faces. All development billboards are static.

The Company acquired 100% of the Paramount issued capital.

The Company has a call option to acquire, and the vendors of Vail a put option to sell to the Company, 100% of Vail at any time between 1 January 2017 and 31 December 2017.

The acquisition of Paramount completed on 23 June 2015.

Octopus Acquisition

The “Octopus Acquisition” involved the acquisition of Plexity Holdings Pty Ltd which holds the Octopus Media outdoor advertising sites, being 18 operational billboards on sites in Victoria (15), NSW (1) and Qld (2). 8 billboards are digital (on 7 sites) and 10 are static (on 8 sites).

The Company acquired 80% of Plexity Holdings Pty Ltd on 25 June 2015 and has the right to acquire the remaining 20% with a call option. The Octopus Media name is not being acquired as part of the acquisition.

The Company also has a call option to acquire 100% of Octopus Property Pty Ltd at any time until the earlier of 31 December 2015 and 60 days after certain conditions are satisfied. Octopus Property Pty Ltd has one operational digital billboard in Victoria.


54

BMG Australasia Acquisition

The “BMG Australasia Acquisition” involved the acquisition of a 65% interest in BMG Australasia Pty Ltd (“BMG”). BMG provides design, logistics and installation solutions for advertisers and is complementary to the MMTB and Omnigraphics businesses acquired as part of the QMS APAC Acquisition.

The BMG Australasia Acquisition completed on 25 June 2015.

The Company has the right to buy the balance of the shares in two tranches of 25% and 10% after the end of FY2016 and FY2017 respectively.

(b) Consideration transferred

Table 22(f) summarises the acquisition-date fair value of each major class of consideration transferred.

(i) Equity instruments issued

The fair value of the ordinary shares issued was based on the listed share price of the Company at 29 June 2015 of $0.65 per share.

(ii) Deferred and contingent consideration

The Group has agreed to pay the selling shareholders various amounts over the preceding three periods’ consisting of consideration of $22,761,000. Some of these payments are contingent upon QMS exercising the rights under the relevant put/call option deeds, whilst other require capital works to be delivered by the vendor prior to settlement. The Group has included the $22,761,000 as deferred and contingent consideration related to the additional consideration, which represents its fair value at the reporting date.

(c) Acquisition-related costs

The Group incurred acquisition-related costs of $1,040,000 on legal fees and due diligence costs.

(d) Identifiable assets acquired and liabilities assumed

Table 22(f) summarises the recognised amounts of assets acquired and liabilities assumed at the relevant acquisition dates.

The valuation techniques used for measuring the fair value of material assets acquired were as follows.

Assets acquired

Valuation technique

Property, plant and equipment

Market comparison technique and cost technique: The valuation model considers quoted market prices for similar items when available, and depreciated replacement cost when appropriate. Depreciated replacement cost reflects adjustments for physical deterioration as well as functional and economic obsolescence.

Site lease intangibles

Excess earnings method: The fair value is determined based on discounting the incremental cash flows based on Earnings Before Interest and Tax directly attributable to the site, over the weighted average contractual life, to arrive at a net present value. The valuation involves a number of key assumptions including the risk-adjusted discount rate, growth rate of revenue, gross margin, the weighted average useful life and the overall underlying customer attrition rate. All these inputs are highly judgmental, with the customer attrition rate representing the most sensitive driver of the net present value. If the attrition rate was to increase or decrease by 5% this would have the impact of decreasing or increasing the valuation by $2,200,000.


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The following fair values have been measured on a provisional basis:

The fair value of all intangible assets have been measured provisionally pending completion of a valuation.

If new information obtained within one year from the acquisition date about facts and circumstances that existed at the acquisition date identifies adjustments to the above amounts, or any additional provisions that existed at the acquisition date, then the accounting for the acquisition will be revised.

(e) Goodwill

Goodwill arising from the acquisition has been recognised as the excess of the consideration paid above the fair value of the assets acquired as a part of the business combination.

The goodwill is attributable mainly to the skills and technical talent of the acquired entities’ work force, and the synergies expected to be achieved from integrating the Company into the Group’s existing business. None of the goodwill recognised is expected to be deductible for tax purposes.


56

(f) Summary of acquisition of subsidiaries acquired

Note

QMS Australia

Pty Ltd Q Media Pty Ltd

Standout Media

Pty Ltd

MMT Land Pty

Ltd MMTB Pty Ltd PT Insite Media

BMG Australasia

Pty Ltd

Plexity Holdings

Pty Ltd

Paramount

Outdoor Pty Ltd

Omnigraphics

Pty Ltd Other Total

$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000

Cash 7,500 8,000 4,000 6,000 7,500 8,000 2,925 10,000 7,200 7,504 1,270 69,899

Equity instruments 7,500 - - - - - - - - 839 - 8,339

Deferred and contingent consideration 18 - - - - - - 1,552 4,500 2,070 - 2,781 10,903

Acquisitions not yet settled - - - - - - - - - - (2,781) (2,781)

Total consideration transferred 15,000 8,000 4,000 6,000 7,500 8,000 4,477 14,500 9,270 8,343 1,270 86,360

Cash and cash equivalents (206) (214) 1 - 106 1,085 - - 1 859 12 1,644

Trade & other receivables 4,179 2,490 380 - 1,707 890 - - - 1,657 570 11,873

Inventories - - - - 271 - - - - 410 - 681

Deferred tax assets/(liabilities) 9(d) 30 50 (85) 3 55 1 - (266) 44 (141) 12 (297)

Property, plant and equipment 12(a) 3,232 414 - 5,693 724 111 17 1,160 281 2,673 83 14,388

Intangible assets 13(a) 180 - 1,440 - 88 - - - - - - 1,708

Trade & other payables (2,052) (4,787) (882) (67) (617) (219) (58) - (485) (1,053) (724) (10,944)

Loans and borrowings (1,896) - - - (190) - - - (101) (1,107) 97 (3,197)

Provisions 19 (774) (160) (75) - (273) - (303) (146) (657) (36) (2,424)

Total identifiable net assets acquired

2,693 (2,207) 779 5,629 1,871 1,868 (41) 591 (406) 2,641 14 13,432

Consideration transferred 15,000 8,000 4,000 6,000 7,500 8,000 4,477 14,500 9,270 8,343 1,269 86,359

Less: Total identifiable net assets 2,693 (2,207) 779 5,629 1,871 1,868 (41) 591 (406) 2,641 14 13,432

Less: Recognition of site lease

intangible 13(a) 2,579 - 1,471 - - 1,631 - 4,616 4,305 - - 14,602

Less: Recognition of make good

provision 19 - - - - - - - (230) (450) - - (680) Goodwill 9,728 10,207 1,750 371 5,629 4,501 4,518 9,523 5,821 5,702 1,255 59,005


57

(i) Future minimum lease payments

At 30 June 2015, the future minimum lease payments under non-cancellable leases were payable as follows.

2015 2015 2015

Site Rent Other Total

$'000 $'000 $'000

Less than one year 7,517 3,728 11,245

Between one and five years 34,285 2,038 36,323

More than five years 21,167 875 22,042

62,969 6,641 69,610

(ii) Amounts recognised in profit or loss

2015 2015 2015

Site Rent Other Total

$'000 $'000 $'000

Lease expense 523 149 672

523 149 672

As at 30 June 2015, the Group has contracted to purchase property, plant and equipment for $3,163,000 to be incurred during 2016.

(a) Key management personnel

Barclay Nettlefold is a director, controller of, substantial shareholder in, and the beneficiary of the following companies and underlying trusts:

Wenvale Pty Ltd ATF the Barclay Nettlefold Family Trust (“Wenvale”);

Nosea Pte Ltd (“Nosea”):

Media Puzzle Pte Ltd (“MPPL”); and

Titan MG Pty Ltd ATF Titan MG Trust (“Titan MG”).

Philip Murray Mehrten (resigned as director of the Company on 10 April 2015) is a director, controller of, substantial shareholder in, and the beneficiary of the following companies and underlying trusts:

Carinya (Aust) Pty Ltd;

Mediascape Pty Ltd ATF Mediascape Trust (“Mediascape”);

Mediascape Finance Pty Ltd; and

Bata Pty Ltd ATF Mehrten Share Trust (”Mehrten Share”).


58

(b) Transactions with key management personnel

(i) Loans to directors and their related entities

The transactions relating to directors and their related entities comprised:

Assumed in

business

combinations

Movement

during the

period

Date fully

repaid

Balance at

30 June

2015

$'000 $'000 $'000

Amounts Payable

Wenvale (175) 175 19-Jun-15 -

Carinya (Aust) Pty Ltd (438) 438 24-Mar-15 -

Mediascape (926) 926 19-Jun-15 -

Mediascape Finance Pty Ltd (1,200) 1,200 20-Mar-15 -

Mehrten Share (300) 300 20-Mar-15 -

(3,039) 3,039 -

No interest was payable by the directors and their related entities during the financial period.

(ii) Key Management Personnel compensation

Compensation of the Group’s KMP includes salaries, non-cash benefits and contributions to complying superannuation funds.

The KMP compensation comprised:

2015

$'000

Short-term employee benefits 423

Post-employment benefits 13

436

Short-term employee benefits of the Group’s KMP includes salaries and consulting fees.

(iii) Key Management Personnel and director transactions

The Company entered into the following transactions relating to KMP:

Wenvale was the owner of 60% of the shares in Riverview Signage Pty Ltd, the trustee of Riverview Signage Trust and 60% of the units in the Riverview Signage Trust. The Company acquired 100% of the shares in Riverview Signage Pty Ltd and units in the Riverview Signage Trust on 17 March 2015. Wenvale received 16,978,022 shares as consideration for that interest. The consideration was set on an arm’s length basis by the other shareholder in the transaction.

MPPL was the owner of 50% of QMS Australia Pty Ltd, which in turn owned 100% of QMS Rail Media Pty Ltd and 50% of the Digital Outdoor Group Pty Ltd. The Company acquired those shares in QMS Australia Pty Ltd on 18 March 2015. MPPL received 38,840,659 shares as consideration for that interest and has subsequently transferred those shares to Wenvale. The consideration was set on an arm’s length basis by reference to the acquisition price allocated to the remaining 50% of QMS Australia Pty Ltd in the QMS APAC Acquisition.

Nosea was the 20% owner of shares in QMS APAC Limited, which was the trustee of interests in an unincorporated joint venture of which Nosea held a 20% interest in. QMS APAC Limited was the vendor of the companies under the QMS APAC acquisition. However under that transaction, Nosea did not receive any consideration from the Company.


59

In support of the warranties and indemnities granted in the QMS APAC transaction, Wenvale has agreed to act as warrantor and in support of that role has entered into a buyback deed under which the Company can buy back shares for nominal consideration in satisfaction of any claims agreed or determined in the companies favour under the QMS APAC acquisition.

Titan MG is the holder of a 50% interest of Titan Media NZ Pty Ltd. The Company owns the other 50% of Titan Media NZ Pty Ltd and has entered into a call option deed to acquire Titan MG’s interest. The option fee was $10 and the purchase price for the shares is $1. The consideration was set on an arm’s length basis by reference to the acquisition of the other 50% of shares in Titan Media NZ Pty Ltd which were acquired from an unrelated third party. Nosea has provided working capital support to Titan Media NZ Pty Ltd. The current balance of the working capital loan is $325,357. The option may be exercised at any time until 30 June 2016.

Nosea is the holder of 5% of Titan Media Group Limited. King Victor Limited, a company in which Barclay Nettlefold holds a 1/3rd beneficial interest, holds an additional 16.07% of Titan Media Group Limited. Wenvale has provided a working capital loan of $300,000 to Titan Media Group Limited.

(c) Other related parties

(i) Other related parties consist of the following:

Titan Media Group NZ Pty Ltd is an equity-accounted investee of which the Group holds an indirect 37.5% shareholding.

(ii) The transactions relating to other related parties comprised:

Balance on date of

investment

Movement during the

period

Balance at

30 June 2015

$'000 $'000 $'000

Amounts Receivable

Titan Media Group NZ Pty Ltd 287 386 673

287 386 673

No interest was payable on the related party loan during the financial period. The loan is not expected to be received by 30 June 2016.

On the 28th July 2015, the Company executed a facility agreement and associated security documents for new banking facilities with the Australia and New Zealand Banking Group Limited. The facility limit under the new banking facility is $10,010,000 and is available for drawings in Australian dollars by way of cash advance, bank guarantee, equipment and asset financing and ancillary facilities. The maturity date of the facility is 31st October 2016. The facility agreement contains the usual security and financial covenants typical for facilities of this nature.

On the 7th August 2015, Digital Outdoor Media (Vic) Pty Ltd, a 100% wholly owned subsidiary of the Company, completed the acquisition of certain outdoor advertising sites in Victoria operated under the Drive By Media name for $7,626,000.

On 26th August 2015, Ambient Advertising NZ Limited, a 75% owned subsidiary of the Company, signed a Media Services agreement with Auckland Transport to manage all the existing outdoor advertising assets of Auckland Transport.


60

Other than the matters discussed above, there has not arisen in the interval between the end of the financial period and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the directors of the Company, to affect significantly the operations of the Group, the results of those operations, or the state of affairs of the Group, in future financial periods.

Note 2015

$'000

Cash flows from operating activities

Profit (4,894)

Adjustments for:

Depreciation 12(a) 70

Amortisation 13(a) 182

Net finance costs 7 3,048

Asset write-off 2

Non-controlling interest 50

IPO Transaction costs 1,225

Costs associated with acquisitions 1,040

Gain on remaining interest acquired in associates (795)

Tax benefit 9(a) (743)

(815)

Change in trade and other receivables 1,545

Change in trade and other payables 1,607

Change in provisions and employee benefits 49

Change in deferred income/revenue 392

Cash generated from operating activities 2,778

Interest paid (12)

Income taxes paid -

Net cash from operating activities 2,766

2015

Audit and review services $'000

Auditors of the Company - KPMGAudit and review of financial statements 200

200

Other services

Auditors of the Company - KPMG

Investigating Accountants services in relation to IPO 1,665

1,665


61

As at, and throughout, the financial period ending 30 June 2015 the parent entity of the Group was QMS Media Limited.

2015

$'000

Result of parent entity

Profit/(loss) for the year (2,628)

Other comprehensive income/(loss) -

Total comprehensive income/(loss) for the year (2,628)

Financial position of parent entity at period end

Current assets 99,400

Total assets 114,813

Current liabilities (806)

Total liabilities (806)

Total equity of parent entity comprising of:

Share capital (120,197)

Share issue costs (net of tax) 3,562

Retained earnings 2,628

Total equity (114,007)

(a) Parent entity guarantees, contingent liabilities and capital commitments

The Group has not entered into a Deed of Cross Guarantee with any subsidiaries within the Group and there are no contractual commitments by QMS Media Limited to acquire any property, plant or equipment.

The following significant accounting policies have been adopted in the preparation of the attached financial statements.

(a) Principles of consolidation

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of the Company and the results of subsidiaries.

(i) Subsidiaries

Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has the rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The assets, liabilities and results of all subsidiaries are fully consolidated into the financial statements of the Group from the date on which control is obtained by the Group. The consolidation of a subsidiary is discontinued from the date that control ceases. Intercompany transactions, balances and unrealised gains or losses on transactions between Group entities are fully eliminated on consolidation. Accounting policies of subsidiaries are consistent with accounting policies adopted by the Group.

Associates are all entities over which the Group has significant influence but not control or joint control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting, after initially being recognised at cost. The Group’s investment in associates includes goodwill (net of any accumulated impairment loss) identified on acquisition.


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(b) Income tax

The income tax expense/(income) for the period comprises current income tax expense/ (income) and deferred tax expense/(income). Current income tax expense charged to profit or loss is the tax payable on taxable income. Current tax liabilities/(assets) are measured at the amounts expected to be paid to/(recovered from) the relevant taxation authority. Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the period. Current and deferred income tax expense/(income) is charged or credited outside profit or loss when the tax relates to items that are recognised outside profit or loss.

Except for business combinations, no deferred income tax is recognised from the initial recognition of an asset or liability, where there is no effect on accounting or taxable profit or loss.

Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled and their measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or liability. With respect to non-depreciable items of property, plant and equipment measured at fair value and items of investment property measured at fair value, the related deferred tax liability or deferred tax asset is measured on the basis that the carrying amount of the asset will be recovered entirely through sale.

Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.

Where temporary differences exist in relation to investments in subsidiaries deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be controlled and it is not probable that the reversal will occur in the foreseeable future.

Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur.

(i) Tax Consolidation Legislation

The Company and its wholly-owned Australian controlled entities intend to form a tax consolidated Group and apply the tax consolidation legislation however as at 30 June 2015 this has not occurred.

The deferred tax balances recognised by the parent entity and the Group in relation to wholly-owned entities joining the tax consolidated Group are initially measured and remeasured based on the carrying amounts of the assets and liabilities of those entities at the level of the tax consolidated Group and their tax values, as applicable under the tax consolidation legislation.

The Company, as the head entity in the tax consolidated Group, recognises current and deferred tax amounts relating to transactions, events and balances of the controlled entities in this Group as if those transactions, events and balances were its own, in addition to the current and deferred tax amounts arising in relation to its own transactions, events and balances. Amounts receivable or payable under a tax sharing agreement with the tax consolidated entities are recognised as tax-related amounts receivable or payable. Expenses and revenues arising under the tax sharing agreement are recognised as a component of income tax (expense)/benefit.

In accordance with UIG 1052 Tax Consolidation Accounting, the controlled entities in the tax consolidated Group account for their own deferred tax balances, except for those relating to tax losses. The deferred tax balances on business combination, as are still provisional, reflects the management’s intention to enter into a tax consolidated Group.


63

(c) Receivables and revenue recognition

(i) Revenue recognition

Revenue is recognised at the fair value of the consideration received or receivable, net of the amount of goods and services tax. Revenue from core operating activities consists of outdoor advertising revenues. Revenue from outdoor advertising is recognised equally on a pro-rata basis over the period in which the advertising is on display. Revenue for media production work is recognised on completion of the assignment. Commissions payable to advertising agencies are recognised as direct costs.

(ii) Receivables

Trade and other receivables include amounts due from customers for goods sold and services performed in the ordinary course of business. Receivables expected to be collected within 12 months of the end of the reporting period are classified as current assets. All other receivables are classified as non-current assets.

Recoverability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off. A provision for doubtful receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of receivables. The amount of the provision is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. Cash flows relating to short term receivables are not discounted if the effect of discounting is immaterial. The amount of the provision is recognised in the statement of comprehensive income.

(iii) Interest income

Interest income is recognised on a time proportion basis using the effective interest method.

(d) Plant and equipment

Plant and equipment are measured on the cost basis and therefore carried at cost less accumulated depreciation and any accumulated impairment losses. In the event the carrying amount of plant and equipment is greater than the estimated recoverable amount, the carrying amount is written down immediately to the estimated recoverable amount and impairment losses are recognised either in profit or loss or as a revaluation decrease if the impairment losses relate to a revalued asset. A formal assessment of recoverable amount is made when impairment indicators are present.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the profit or loss during the financial period in which they are incurred.

The depreciable amount of all fixed assets is depreciated on a straight-line basis over the asset’s useful life to the consolidated Group commencing from the time the asset is held ready for use.

The expected useful lives are as follows:

LED Digital signs 12 years

Static signs 20 years

Machinery & Equipment 12 years

Office Equipment 4-5 years

Leasehold Improvements 10 years

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.


64

Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are recognised in profit or loss in the period in which they arise. When revalued assets are sold, amounts included in the revaluation surplus relating to that asset are transferred to retained earnings.

(e) Intangible assets

(i) Goodwill

Goodwill represents the excess of the purchase consideration plus incidental costs over the fair value of the identifiable net assets acquired. Goodwill acquired in business combinations is not amortised. Instead, goodwill is tested for impairment annually, or more frequently, if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses.

Goodwill is allocated to cash-generating units for the purpose of impairment testing. Each of these cash-generating units represents the Group’s investment in each business segment.

(ii) Other Intangibles

Other intangible assets represent the rights associated with acquired leases and the associated new business revenue streams. These other intangible assets are being amortised over the remaining term of the acquired leases (ranging from 8-20 years).

(f) Other financial assets

Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions to the instrument. For financial assets, this is equivalent to the date that the Group commits itself to either the purchase or sale of the asset (i.e. trade date accounting is adopted).

The Group classifies its financial assets in the following categories: financial assets at fair value through profit or loss and loans and receivables. The classification depends on the purpose for which the assets were acquired. Management determines the classification of its assets at initial recognition.

(i) Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this category if acquired principally for the purpose of selling in the short term. Derivatives are classified as held for trading unless they are designated as hedges. Assets in this category are classified as current assets if they are expected to be settled within 12 months; otherwise they are classified as non-current.

(ii) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for those with maturities greater than 12 months after the reporting period which are classified as non-current assets. Loans and receivables are included in trade and other receivables in the balance sheet.

(iii) Recognition and derecognition

Regular way purchases and sales of financial assets are recognised on trade-date – the date on which the Group commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership. When securities classified as available-for-sale are sold, the accumulated fair value adjustments recognised in other comprehensive income are reclassified to profit or loss as gains and losses from investment securities.


65

(iv) Measurement

At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss. Loans and receivables and held-to-maturity Investments are subsequently carried at amortised cost using the effective interest method.

(g) Leases

A distinction is made between finance leases which effectively transfer from the lessor to the lessee substantially all the risks and benefits incidental to ownership of leased non-current assets and operating leases under which the lessor effectively retains substantially all such risks and benefits.

(i) Operating leases

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the profit or loss on a straight-line basis over the period of the lease.

(ii) Finance leases

Finance leases are capitalised. A lease asset and a lease liability equal to the present value of the minimum lease payments are recorded at the inception of the lease. Lease liabilities are reduced by repayments of principal.

(h) Trade and other payables

Trade and other payables represent the liabilities for goods and services received by the entity that remain unpaid at the end of the reporting period. The balance is recognised as a current liability with the amounts normally paid within 30 days of recognition of the liability.

Unearned income is recognised within trade payables where rental invoices are issued in advance of the period in which the revenue is earned.

(i) Employee benefits

(i) Wages and salaries, annual leave and sick leave

Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within 12 months of the reporting date are recognised in the provision for employee benefits in respect of employee’s services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for non-accumulating sick leave are recognised when the leave is taken and measured at the rates paid or payable.

(ii) Long service leave

The liability for long service leave is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service.

Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.


66

(iii) Termination benefits

Termination benefits are payable when employment is terminated before the normal retirement date, or when an employee accepts voluntary redundancy in exchange for these benefits. The Group recognises termination benefits when it is demonstrably committed to either terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal or to providing termination benefits as a result of an offer made to encourage voluntary redundancy. Benefits falling due more than 12 months after the end of the reporting period are discounted to present value.

(iv) Superannuation

The Group contributes superannuation benefits to numerous, but solely accumulation-type superannuation funds including personal, award based at various percentages of salary pursuant to employee contracts and statutory obligations.

(v) Employee benefit on-costs

On-costs, including payroll tax, are recognised and included in employee benefit liabilities and costs when the employee benefits to which they relate are recognised as liabilities.

(j) Cash and cash equivalents

Cash and cash equivalents include cash on hand, deposits available on demand with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts.

(k) Business combinations

Business combinations occur where an acquirer obtains control over one or more businesses.

A business combination is accounted for by applying the acquisition method, unless it is a combination involving entities or businesses under common control. The business combination will be accounted for from the date that control is attained, whereby the fair value of the identifiable assets acquired and liabilities (including contingent liabilities, if applicable) assumed is recognised (subject to certain limited exemptions).

The Group has provided for payment of additional consideration in relation to certain acquisitions. The consideration has been discounted over the time in which it is due. The excess of the consideration transferred over the fair value of the Group’s share of the identifiable net assets acquired is recorded as goodwill. If the consideration transferred is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised directly in profit or loss, but only after a reassessment of the identification and measurement of the net assets acquired

Consideration transferred as part of the business combination may include deferred consideration or contingent consideration.

Deferred consideration is recognised and measured at fair value at the acquisition date and is included in the consideration transferred. The unwinding of any interest element of deferred consideration is recognised in the profit or loss.

Contingent consideration is an obligation to transfer additional payments to the former owners if certain specified future events are met. Contingent consideration is measured at fair value on the acquisition date and included in the consideration transferred. Contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity. Contingent consideration classified as an asset or liability is measured at fair value at the acquisition date and is remeasured at each reporting date until the contingency is settled, with changes in fair value recognised in profit or loss.


67

The Group has entered into a number of put options and forward contracts to acquire the remaining non-controlling interests in certain entities. Where the non-controlling interest still has present access to the returns in the entity, the Group has elected to adopt the anticipated acquisition method of accounting whereby the contract is accounted for as if the put option has been exercised or the forward has been satisfied by the non-controlling shareholders. The Group has recognised a liability for the present value of the exercise price of the option or of the forward purchase price. The Group has elected to recognise any subsequent changes in the fair value of the put liability in equity including any changes in the accretion of interest. Subsequent changes to the fair value of the forward contracts are recognised in the profit or loss.

All transaction costs incurred in relation to business combinations, other than those associated with the issue of a financial instrument, are recognised as expenses in profit or loss when incurred.

Where the Company acquires an entity that is classified as a common control transaction, the Company has made an accounting policy choice to recognise the assets acquired and liabilities assumed using book values, with an adjustment made to a separate component of equity (the merger reserve) to reflect any difference between the consideration paid and the capital of the acquiree.

(l) Impairment of assets

Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell, and value in use. For the purposes of assessing impairment, the QMS assets are disclosed as a single operating segment. Non-financial assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at each reporting date.

(m) Foreign currency translation

(i) Functional and presentation currency

Items included in the financial statements of each of the consolidated entities are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in Australian dollars, which is the Company’s functional and presentation currency.

(ii) Transactions and balances

Transactions in foreign currencies are translated to the functional currency of the Group at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated to the functional currency at the exchange rate at the reporting date. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated to the functional currency at the exchange rate when the fair value was determined. Non-monetary items that are measured based on historical cost in a foreign currency are not translated.

(iii) Foreign controlled entities

The results and financial position of foreign operations (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;

income and expenses for each statement of comprehensive income are translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and

all resulting exchange differences are recognised as a separate component of equity.


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On consolidation, exchange differences arising from the translation of any net investment in foreign operations, and of borrowings and other financial instruments designated as hedges of such Investments, are taken to shareholders’ equity. When a foreign operation is sold, ceases operation or any borrowings forming part of the net investment are repaid, a proportionate share of such exchange differences are recognised in the statement of comprehensive income, as part of the gain or loss on sale where applicable. Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the closing rate.

(n) Borrowings

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates.

The fair value of the liability portion of a convertible bond is determined using a market interest rate for an equivalent non-convertible bond. This amount is recorded as a liability on an amortised cost basis until extinguished on conversion or maturity of the bonds. The remainder of the proceeds is allocated to the conversion option. This is recognised and included in shareholders’ equity, net of income tax effects.

Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss as other income or finance costs.

Where the terms of a financial liability are renegotiated and the entity issues equity instruments to a creditor to extinguish all or part of the liability (debt for equity swap), a gain or loss is recognised in profit or loss, which is measured as the difference between the carrying amount of the financial liability and the fair value of the equity instruments issued.

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period.

(o) Financing costs

Financing costs are recognised as expenses in the period in which they are incurred. Financing costs include interest on bank overdraft, finance lease charges, short-term and long-term borrowings and ancillary costs incurred in connection with arrangement of borrowings.

(p) Maintenance and repairs

Certain plant and equipment is required to be overhauled on a regular basis. This is managed as part of an ongoing major cyclical maintenance program. The costs of this maintenance are charged as expenses as incurred, except where they relate to the replacement of a component of an asset, in which case the costs are capitalised and depreciated. Other routine operating maintenance, repair costs and minor renewals are charged as expenses as incurred.

(q) Provisions

Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, the future sacrifice of economic benefits is probable, and the amount of the provision can be measured reliably.


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A make good provision is recognised for the costs of restoration or removal in relation to plant and equipment and site leases where there is a legal or constructive obligation. The provision is initially recorded when a reliable estimate can be determined and discounted to present value. The unwinding of the effect of discounting on the provision is recognised as a finance cost.

(r) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the balance sheet.

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flows.

(s) Shared based payment transactions

The Company may engage in the practice of allocating its employees shares and share options as part of their remuneration packages.

The grant-date fair value of share-based payment awards granted to employees is recognised as a share based payment expense, with a corresponding increase in equity, over the period that the employees become unconditionally entitled to the awards. The fair value of the equity instrument is calculated using the Black-Scholes model. The amount recognised as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards that do not meet the related service and non-market performance conditions at the vesting date. For share-based payment awards with non-vesting conditions, the grant-date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.

(t) Segment reporting

Results that are reported to the Board (the chief operating decision maker) are based on a single operating segment basis.

(u) Earnings per share

The Company presents basic and diluted earnings per share data. Basic earnings per share is calculated by dividing the net loss attributable to shareholders of the Company by the weighted average number of common shares outstanding during the years. The earnings per share is determined by adjusting the net loss attributable to common shareholders and the weighted average number of common shares outstanding for the effects of all dilutive potential common shares. The Company uses the treasury stock method for calculating diluted earnings per share. The diluted earnings per share calculation considers the impact of potentially dilutive instruments, if any.

A number of new standards, amendments to standards and interpretations are effective for annual periods beginning on or after 1 July 2015 (unless otherwise stated), and have not been applied in preparing these consolidated financial statements.

Those which may be relevant to the Group are set out below. The Group does not plan to early adopt these standards.


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(a) AASB 2014-1 Amendments to Australian Accounting Standards – Part E: Financial Instruments

Defers the mandatory application date of AASB 9 Financial Instruments to annual reporting periods beginning on or after 1 January 2018. This aligns with the IASB’s tentative decision that IFRS 9 will be mandatorily effective for years beginning on or after 1 January 2018

(b) AASB 15 Revenue from contracts with customers

AASB 2015-5 Amendments to Australian Accounting Standards arising from AASB 15

AASB 15 (effective on or after 1 January 2017) introduces a five step process for revenue recognition with the core principle of the new Standard being for entities to recognise revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration (that is, payment) to which the entity expects to be entitled in exchange for those goods or services.

Accounting policy changes will arise in timing of revenue recognition, treatment of contracts costs and contracts which contain a financing element. AASB 15 will also result in enhanced disclosures about revenue, provide guidance for transactions that were not previously addressed comprehensively (for example, service revenue and contract modifications) and improve guidance for multiple element arrangements.

The changes in revenue recognition requirements in AASB 15 may cause changes to the timing and amount of revenue recorded in the financial statements as well as additional disclosures. The impact of AASB 15 has not yet been quantified.

(c) AASB 9 Financial Instruments (December 2010) (includes financial assets and financial liability requirements)

AASB 2010-7 Amendments to Australian Accounting Standards arising from AASB 9 (December 2010)

AASB 9 Financial Instruments (December 2009) (Financial asset requirements only)

AASB 2009-11 Amendments to Australian Accounting Standards arising from AASB 9

In AASB 9 (December 2010), the AASB added requirements for the classification and measurement of financial liabilities that are generally consistent with the equivalent requirements in AASB 139 except in respect of the fair value option; and certain derivatives linked to unquoted equity instruments.

The AASB also added the requirements in AASB 139 in relation to the derecognition of financial assets and financial liabilities to AASB 9.

AASB 9 retains but simplifies the mixed measurement model and establishes two primary measurement categories for financial assets; amortised cost and fair value. The basis of classification depends on the entity’s business model and the contractual cash flow characteristics of the financial asset.

The guidance in AASB 139 on impairment of financial assets. Guidance on hedge accounting continues to apply as long as hedge accounting provisions in AASB 2013-9 not applied.

QMS Media Limited Directors’ declaration 30 June 2015

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1. In the opinion of the directors of QMS Media Limited:

(a) the consolidated financial statements and notes that are set out on pages 32 to 70 and the Remuneration report in section 20 of the Directors’ report, are in accordance with the Corporations Act 2001, including:

(i) giving a true and fair view of the Group’s financial position as at 30 June 2015 and of its performance, for the financial period ended on that date; and

(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and

(b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

2. The directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the chief executive officer and chief financial officer for the financial period ended 30 June 2015.

3. The directors draw attention to Note 2 to the consolidated financial statements, which includes a statement of compliance with International Financial Reporting Standards.

Signed in accordance with a resolution of the directors:

Wayne Stevenson Barclay Nettlefold

Chairman Director and Chief Executive Officer

29 September 2015

Melbourne

QMS Media Limited Independent audit report 30 June 2015

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QMS Media Limited Independent audit report 30 June 2015

73

QMS Media Limited ASX additional information 30 June 2015

74


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Additional information required by the ASX Limited Listing Rules and not disclosed elsewhere in this report is set out below.

Substantial shareholders

The number of shares held by substantial shareholders and their associates are set out below:

Shareholder Number

Wenvale Pty Ltd

Mediascape Pty Ltd

J P Morgan Nominees Australia

National Nominees Limited

HSBC Custody Nominees

17.91%

12.55%

10.06%

6.48%

5.35%

Voting rights – Ordinary shares

On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote.

Securities subject to voluntary escrow

Shareholder

Shares subject to

voluntary escrow Period of escrow^

Wenvale Pty Ltd ATF Barclay Nettlefold Family Trust 45,059,239 2 years

Mediascape Pty Ltd ATF the Mediascape Trust 31,569,985 1 year

John O'Neill Pty Ltd ATF O'Neill Pastoral Discretionary Trust 5,961,538 50% 1 year / 50% 2 years

David Edmonds # 1,375,000 50% 1 year / 50% 2 years

Other management 4,606,250 50% 1 year / 50% 2 years

88,572,012

# includes shares held by David Edmonds and Anne Hutton ATF Hutmond Family Trust

^ applies from date of listing of shares 29 June 2015

Distribution of equity security holders

Number of equity

security holders

Category Ordinary shares

1 - 1,000 1

1,001 - 5,000 24

5,001 - 10,000 88

10,001 - 100,000 657

100,001 and over 119

889

The number of shareholders holding less than a marketable parcel of ordinary shares is nil.


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Securities Exchange

The Company is listed on the Australian Securities Exchange. The Home exchange is Melbourne.

Other information

QMS Media Limited, incorporated and domiciled in Australia, is a publicly listed company limited by shares.

On-market buy-back

There is no current on-market buy-back.

Unquoted equity securities

There are no unquoted equity securities.

Twenty largest shareholders

Name Number of ordinary shares held Percentage of capital held

Wenvale Pty Ltd 45,059,236 17.91%

Mediascape Pty Ltd 31,569,985 12.55%

JP Morgan Nominees Australia 25,304,627 10.06%

National Nominees Limited (No.1) 16,305,896 6.48%

HSBC Custody Nominees (No. 1) 13,458,220 5.35%

BNP Paribas Noms Pty Ltd 8,696,439 3.46%

UBS Nominees Pty Ltd (No. 1) 6,250,000 2.48%

RBC Investor Services (No. 1) 6,153,846 2.45%

Morgan Stanley Australia 6,095,003 2.42%

John O'Neill Pty Ltd 5,961,538 2.37%



UBS Nominees Pty Ltd (No. 2) 3,925,761 1.56%

Citicorp Nominees Pty Limited 3,311,827 1.32%

National Nominees Limited (No. 2) 2,884,616 1.15%



Smallco Investment Manager Ltd 2,365,384 0.94%

CS Fourth Nominees Pty Ltd 1,740,691 0.69%

National Nominees Limited (No. 3) 1,435,536 0.57%

194,567,365 77.33%


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Company Secretary

Anthony Carafa


Principal Registered Office

Dobbyn and Carafa

Chartered Accountants

Level 9

636 St Kilda Road

Melbourne 3004

Telephone +613 8530 1669

Facsimile +613 8530 1616

Locations of Share Registries

Melbourne

Computershare Investor Services Pty Limited

Yarra Falls

452 Johnson Street

Abbotsford

Victoria 3067

Telephone 1300 137 328

Facsimile 1300 137 341

Documents

QMS Media Limited - Homepage - QMS · PDF fileAuditor’s independence declaration under Section 307C of the Corporations ... QMS Media is one of Australia’s leading outdoor advertising